Bitcoin and Ether Rally To 3-Week Highs

The markets are off to a strong start this week, with Ether rallying above $1,900 and Bitcoin briefly trading above $28,000 — their highest levels in nearly three weeks.

Investors cheered the news that Democrats and Republicans are making progress toward a deal to increase the U.S. debt ceiling. On Sunday, House Speaker Kevin McCarthy told the media that he and Biden had reached an “agreement in principle” regarding the government’s borrowing limit ahead of the June 5 deadline.

“It has historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, rein in government overreach, there are no new taxes, no new government programs, there’s a lot more within the bill,” McCarthy said.

President Biden described the deal as a compromise intended to avert a “catastrophic default [that] would have led to an economic recession.”

The deal suspends the debt level entirely until 2025, leaving the federal government free to issue new debt.

DeFi Rallies

DeFi assets represent a combined market capitalization of $48.5B after gaining more than 5% over the past three days, according to CoinGecko.

The total value locked in DeFi products grew by $1.5B over the past three days, bringing the sector’s total above $48B. Three-quarters of the top 100 protocols posted TVL growth for the past week.

Lybra Finance, an Ethereum-based stablecoin protocol offering 0% maintenance and minting fees, posted a 181% increase in TVL to $170M in the past week.

Token Unlocks Loom

According to Tokenunlocks, several major web3 projects will release sizable tranches of tokens onto the market this week. Significant unlocks have historically led to added selling pressure on the affected tokens.

On May 31, 3.6% of Optimism’s OP supply, worth $258M, will be distributed, alongside $100M worth of 1INCH, $67M worth of Hedera’s HBAR token and $65M worth of SUI.

Notable unlocks also lie ahead for Blur ($102M), Aptos ($38M), and dYdX ($13.7M) in the coming month.