The US government officially shut down in the middle of the night after Congressional lawmakers failed to pass a new funding bill.
Wall Street was dumped in early trading, but Bitcoin prices surged to a fresh high of over $118,000.
At 12:01am, the funding bill that would keep the government running kept most of the federal equipment closed. Social Security Beneficiaries, federal workers and travelers will feel the immediate impact, but the market is already showing signs of stress.
Bitcoin has been trading sideways in recent months, but key liquidity metrics suggest that breakouts may be approaching. Global M2 growth, stubcoin supply trends, and the Gold Rally – Bitcoin is closely tracking with a 40-day delay – pointing to all momentum, with some analysts looking at $150,000 in early November.
The futures of three major US indexes were noted lower than today before the opening bell in pre-market trading. The S&P 500 was 0.58% lower, Dow futures was 0.52% lower, and Nasdaq futures was 0.67% lower.
Meanwhile, in addition to Bitcoin prices, Gold has surged to an all-time high of over $3,900 per ounce as investors fled to safe assets.
Government blackout?
The market is also fighting for sudden blackouts in government statistics. Shutdown means that the Bureau of Labor Statistics will not release weekly unemployment claims or September salary reports. Inflation data scheduled for mid-October could also be delayed if the standoff is dragged.
With economic outlook this week being vague and no work has been reported on Friday, the Federal Reserve will make fee decisions in the dark. Economists warn that every week of government closures it could trim GDP growth by 0.1-0.2 percent points, and that quarterly closures could cause shaving 2.4 points from the fourth quarter.
Amidst uncertainty, Bitcoin has stepped into the traditional role of Gold and Wall Street.
Cryptocurrencies have gathered rapidly, rising more than 25% since the start of the year, driven by institutional adoption and awareness as hedges against inflation and political risk.
The key question is how long the momentum will last. Historically, the market has recovered rapidly from shutdowns, with stocks being positive for more than half of the 20 shutdowns since 1976. However, the threat of benefits and layoffs could increase the risk this time.
Bitcoin is trading at $118,193 at the time of writing.
This post Bitcoin price was first featured in Bitcoin magazine, over $118,000 when the US government was shut down and is written by Mika Seimerman.
