Bitcoin (BTC) could be on the cusp of a significant price surge if the US government experiences a shutdown beginning on October 1, 2023. This prediction is based on historical precedents where Bitcoin experienced a rally during times of financial uncertainty.
The connection between Bitcoin’s prices and the decisions of the Federal Reserve is well-documented. Yet, the king has consistently thrived during US government shutdowns and banking crises. Additionally, cryptocurrency experts speculate that if Bitcoin manages to breach the $30,000 mark, it could trigger a psychological boost among traders. This surge might be attributed to the looming cloud of fear, uncertainty, and doubt (FUD) cast by the US government closure.
So, where is Bitcoin headed? Let’s dive in.
The Markets Are Bullish for Bitcoin
Earlier in 2023, Bitcoin saw a boost in its price due to the regional banking crisis triggered by bank runs at influential institutions like the Silicon Valley Bank. Similarly, concerns over a potential US government shutdown have led to upward movement in BTC’s price. Meanwhile, Bloomberg experts suggest this could be catastrophic for the US banking sector.
Stephane Ouellette, co-founder of FRNT Financial, noted that Bitcoin’s rally could serve as a hedge against potential banking turmoil. Notably, this sentiment aligns with recent comments from Martin Gruenberg, Chair of the US Federal Deposit Insurance Corporation (FDIC), who highlighted significant risks to the banking industry due to inflation and high interest rates.
James Butterfill, head of research at a crypto asset manager, also backed this sentiment, drawing attention to a previous debt ceiling stalemate that contributed to a surge in Bitcoin prices.
“This scenario resembles the debt ceiling stalemate experienced earlier this year, which ended up bolstering Bitcoin prices.”
This Will Be a Balancing Act
While a government shutdown might trigger a Bitcoin rally, it could also lead to liquidity challenges for crypto businesses. Additionally, the US Securities and Exchange Commission (SEC) may cut down its staffing at a crucial time when considering the approval of Ethereum futures ETFs. There’s speculation that the Valkyrie Bitcoin and Ether ETFs launch might be expedited due to the SEC’s contingency plans in anticipation of a potential shutdown.
Previous government shutdowns have nalso egatively impacted decision-making for cryptocurrency-related businesses. For example, an ambitious proposal for a bitcoin exchange-traded fund may get shelved, with insiders pointing to the shutdown as the cause.
Can Bitcoin Hit $30,000 by End of 2023?
Currently, Bitcoin is in a bear trap. Therefore, traders and experts find themselves debating whether it will reclaim $30,000 before the year ends, especially since Bitcoin is susceptible to interest rate swings, macroeconomic conditions matter.
Following the Federal Reserve’s aggressive tightening program to curb record-high inflation, rates remain high. Next comes the US government shutdown, which may create FUD with significant selling pressure in the market. It will be interesting to see if BTC can hit a new ATH in this changing dynamic.
