What Happens to Bitcoin If the US Government Shuts Down?

Bitcoin traders hope to measure upcoming US employment data to measure whether the Federal Reserve will again lower interest rates as the government is approaching the possibility of a halt.

And how Bitcoin will respond to such events remains uncertain, analysts say it could potentially increase short-term volatility. Past shutdowns have had different effects on prices.

“Rate cut expectations support risk assets, but bubble concerns and political risk amplify short-term volatility. Because of the crypto, this creates both liquidity support and downside uncertainty.” Decryption. “In the medium term, confirmed rate reductions will improve liquidity and support risk assets. In the short term, bubble fear and shutdown risk will increase vulnerability, making sharper ‘drop and rebound’ more likely. ”

Unless Congress enacts a full expenditure invoice or a continuing resolution by midnight Tuesday, federal funding will expire and a partial government closure will occur due to “non-essential” functions. The federal government fiscal year ends on September 30th.

“This week’s big event may not actually happen, as Friday could be the first famous victim of a potential closure of government closure if Congress cannot reach an agreement on a short-term funding resolution by midnight tomorrow night.” Decryption. “It’s true that we’re back in October 2013 and due to the closure, we didn’t receive our September employment report until the 22nd of this month.”

At the time of writing, Bitcoin It rose above $114,000 after winning 3.8% in the past day. According to Crypto Price Aggregator Coingecko, it still delayed the price two weeks ago by 0.7%.

Economic statistics and data processing are not considered important functions. This means that the Bureau of Labor Statistics will need to keep future employment reports until government funding recovers. It’s not that data doesn’t end up occurring, but delays can cause volatility to spike. Investors know that the Federal Reserve monetary policy decisions are heavily affected by employment and inflation data.

Nansen research analyst Nikolai Sondergaard said Decryption Shutdowns could surge in short-term volatility in the crypto market.

“But I think it’s going to be more than that, if investors assume that the ‘shutdown’ will be resolved quickly,” he added. “I would also not be surprised if the potential effects of shutdowns collide with the broader financial markets.

This is not the first shutdown that the crypto market has weathered.

The shutdown in October 2013 extended for 16 days. From October 1st to October 17th, Bitcoin prices rose 14% from $132.04 to $151.34.

However, winning bitcoin during shutdown is not a rule. The longest shutdown ever occurred from December 22, 2018 to January 25, 2019. During that 35-day stretch, Bitcoin fell 6% from $3,802.22 to $3,575.85 by the time it finished.

Myriad users are owned forecast market Decryption Parent company Dastan has become increasingly suspicious of the Federal Open Market Committee, which will offer two rate changes in 2025.

Those in doubt could include those who think the Fed will change prices at both the Federal Open Market Committee policy meetings for the rest of this year, and those who think the committee will wait until 2026 to consider more interest rate changes.

Julio Moreno, head of research at Cryptoquant, said that the closures in 2013 and 2018-2019 found Bitcoin in very different markets.

“The demand for Bitcoin has grown strong as we entered the final stages of the bull cycle. [in 2013]” he said DecryptionHe added that by the time the shutdown occurred in 2018, demand for BTC was contracted in the bear market.

Moreno added that Bitcoin is positioned more like 2013 than 2018.

“When we enter Q4, demand for Bitcoin is increasing, which is usually a positive season in terms of price performance,” he said.