Bitcoin Price Could Rally in Response to US Government Shutdown
If the US government shutdown takes effect on October 1, 2023, the crypto ecosystem could be headed towards a bull run situation similar to what happened in the first quarter of 2023 when the Bitcoin price rallied due to the US regional banking crisis caused by bank runs for influential institutions.
BTC Price Vs Banking Unrest
Analysts suggest that the recent uptrend in BTC price could be a response to concerns about the US government shutdown. This rise in price is seen as a safety hedge against further unrest in the US banking sector. The fear, uncertainty, and doubt (FUD) surrounding the shutdown could catch up with Bitcoin’s after-effects, making any price breakout from the $30,000 milestone a psychological win for traders.
According to James Butterfill, head of research at a crypto asset manager, this scenario is similar to what happened during the debt ceiling stalemate earlier this year, which boosted Bitcoin prices.
Downside For Crypto
While a government shutdown may trigger a BTC price rally, it could also result in a liquidity crunch for crypto businesses. Additionally, the shortage of staff at the US SEC during this time could impact its ability to approve Ethereum futures ETFs. The potential shutdown has prompted preparations and measures from regulatory bodies such as the SEC, potentially advancing the launch of certain ETFs.
Hot Take: Bitcoin’s Potential Response to Government Shutdown
The US government shutdown can have significant implications for both the traditional banking sector and the cryptocurrency market. While Bitcoin may experience a rally as investors seek a safe haven during times of financial uncertainty, crypto businesses may face challenges due to liquidity constraints. It remains to be seen how these dynamics will play out and whether Bitcoin’s rally will be sustained in the face of a potential shutdown. Traders should closely monitor the situation and adjust their strategies accordingly.
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