Bitcoin enthusiasts are closely monitoring upcoming U.S. employment figures to assess whether the Federal Reserve might reduce interest rates again. However, with a potential government shutdown looming, they may have to wait longer for clarity.
The impact of such a shutdown on Bitcoin remains unpredictable, according to analysts who suggest it could lead to increased short-term volatility. Historical shutdowns have had varied effects on Bitcoin’s value.
“Expectations of rate cuts can bolster risk assets, yet concerns about market bubbles and political instability can intensify short-term fluctuations,” noted Bitunix analysts in a statement shared with Decrypt. “While confirmed rate reductions enhance liquidity and support risk assets in the medium term, bubble fears and shutdown risks increase fragility in the short term, making abrupt ‘drop-and-rebound’ movements more probable.”
If Congress fails to pass either a comprehensive appropriations bill or a temporary funding measure by midnight Tuesday, federal operations deemed “non-essential” will cease due to lack of funding as the fiscal year concludes on September 30.
“This week’s major event might not occur as planned; Friday’s payroll data could be an early casualty if Congress doesn’t reach an agreement by tomorrow night,” wrote John Reid from Deutsche Bank in correspondence shared with Decrypt. “In October 2013 during another shutdown scenario, we didn’t receive September’s jobs report until later that month.”
Currently trading above $114,000, Bitcoin has risen 3.8% over the past day but still lags behind its price two weeks ago by 0.7%, according to CoinGecko data.
The Bureau of Labor Statistics would need government funding restored before releasing its forthcoming jobs report since economic statistics aren’t classified as essential functions. Although this information will eventually be published, delays may trigger volatility given how much weight investors place on employment and inflation data influencing Federal Reserve policies.
Nicolai Sondergaard from Nansen told Decrypt:”A potential government closure could spark heightened crypto market fluctuations.” He speculated further saying investors might assume swift resolution is likely or anticipate broader financial impacts even before any actual closure occurs.”
This wouldn’t mark cryptocurrency markets’ first experience navigating through governmental closures either;
The October 2013 closure lasted sixteen days during which time bitcoin prices climbed fourteen percent rising from $132.04 up-to $15 & .34 .
Bitcoin gains aren’t guaranteed amidst such events though ; longest recorded shut-down ran between December twenty-second two-thousand eighteen through January twenty-fifth two-thousand nineteen seeing six percent drop-off falling back downwards starting point at three thousand eight hundred-two dollars & forty-two cents ending thereafter finishing around three thousand five hundred seventy-five dollars eighty-five cents respectively .
Users participating within Myriad prediction marketplace owned via parent company Dastan increasingly skeptical towards FOMC delivering duo alterations throughout calendar year twenty-twenty-five ; doubters rose significantly reaching seventy-five percentage points compared against initial forty observed earlier part September timeframe .
Doubtful individuals include those believing Fed shall adjust rates remaining scheduled meetings alongside others considering postponement until subsequent period commencing possibly beyond into next annum cycle .
Julio Moreno heading research division Cryptoquant remarked differing circumstances surrounding both aforementioned occurrences stating “ Demand surged entering latter stages bullish trend back then whereas contrastingly demand contracted bear phase onset prior second instance materializing later date ” he elaborated further explaining current positioning mirrors previous decade rather than recent downturn concluding positively noting seasonal trends typically favorable Q4 timeframe approaching presently underway …