Here’s what the U.S. government shutdown may mean for Bitcoin
- James Butterfill expects Bitcoin to rally if the U.S. government shuts down.
- BTC has a history of performing quite well in times of uncertainty.
- The world’s largest cryptocurrency is already up close to 4.0% today.
Bitcoin will likely rally if the U.S. government does indeed shut down on October 1st, says James Butterfill – the Head of Research at CoinShares.
Why may BTC rally on shutdown?
The world’s largest cryptocurrency by market cap is already up close to 4.0% on Thursday as the U.S. government started sending out notifications to federal employees that a shutdown may be imminent.
And that rally may extend when the shutdown actually begins, as per CoinShares’ Butterfill. Because the investors could read the funding lapse as a sign of instability and turn to Bitcoin for refuge.
This scenario bears resemblance to the debt ceiling stalemate experienced earlier this year, which ended up bolstering Bitcoin prices.
Bitcoin continues to find a strong support at the $25,000 level.
U.S. banks still have downside risks
Note that Bitcoin saw strength when the likes of Silicon Valley and Signature banks collapsed earlier this year. That speaks a lot about its ability to outperform in times of uncertainty.
And the U.S. financial institutions may not entirely be out of the woods just yet. Martin Gruenberg – Chair of the U.S. Federal Deposit Insurance Corporation (FDIC) recently warned that inflation and higher rates continue to be a significant downside risk for the banking space.
Another near-term tailwind for BTC could be the approval of a Spot Bitcoin ETF – for which the U.S. lawmakers pushed SEC Chair Gary Gensler just a day earlier (find out more).
On Thursday, Rob Ginsberg of Wolfe Research also said that Bitcoin was worth investing at its current price.
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