As the U.S. government faces the possibility of another shutdown, it’s natural to wonder how this will impact the cryptocurrency sector. While there may be uncertainties in the financial markets, there are certain aspects that remain unaffected. Law enforcement agencies like the FBI and court proceedings are expected to continue without significant disruptions. This is good news for high-profile legal cases involving cryptocurrencies.
However, the Securities and Exchange Commission (SEC) is expected to operate with just 9.5% of its staff in case of a shutdown. This has implications for the crypto world, particularly for those waiting for decisions on crypto ETFs. The SEC has already started delaying decisions on many of these ETFs. The upcoming January 10th, 2024 deadline is crucial, as the SEC is expected to make a decision regarding spot Bitcoin ETFs.
When it comes to Ethereum, futures ETFs are in a more favorable position and nearing their launch. However, spot Ethereum products have lower priority according to the SEC.
Despite the political uncertainty in Washington D.C., Bitcoin has shown resilience with a 1.9% increase while traditional hedges like gold experienced a decline of 2.9%. Stocks and bonds also trended downwards, but oil gained with a 2.3% increase.
This current situation serves as a test for cryptocurrencies. Will Bitcoin and other digital assets solidify their reputation as alternative assets and be seen as “digital gold” during times of crisis? Only time and perhaps the decisions made by the U.S. Congress will provide an answer.
Hot Take: The Implications of a Potential Government Shutdown on Cryptocurrency
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