Partial Government Shutdown in the US Benefits the Cryptocurrency Market, Bitcoin Hits Two-Month High! Here Are the Details
Cryptocurrency markets staged a strong recovery on the second day of the partial government shutdown in the US.
Bitcoin Surpasses $121,000, Ethereum Hits Three-Week High
Bitcoin (BTC) surpassed $121,000 on Thursday, hitting its highest level since August 14. Ethereum (ETH) reached a three-week high, trading above $4,500.
The U.S. government officially shut down on October 1st due to a lack of budget consensus in Congress. However, historical data suggests that such shutdowns are not negative for stocks and risk assets.
For example, the S&P 500 index has risen with every government shutdown since 1990. A similar tailwind is said to be effective for Bitcoin, which will exhibit a closer correlation with the stock market in 2025.
Analysts are also emphasizing that Bitcoin has been struggling to match the gold market’s recent rally. While gold broke a record high today, exceeding $3,900, JPMorgan strategists noted that Bitcoin is still undervalued relative to gold and predicted it could reach $165,000 by the end of the year.
Experts, noting that October has historically been the strongest month for Bitcoin, say the “Uptober” narrative could hold true this year as well. Coinbase shares rose 7%, Circle rose 16%, and Bullish rose 11%, suggesting crypto-related companies also joined the rally.
Meanwhile, Bitcoin and Ethereum ETFs saw a total inflow of $2.4 billion this week. The 98% probability of another Fed rate cut at its October meeting is providing additional support to the markets.
*This is not investment advice.