The United States recently faced its first government shutdown in six years, which coincided with a rise in Bitcoin and gold prices as investors sought out safe-haven assets amid political uncertainty.
This shutdown, the first since the prolonged 35-day closure in 2018, resulted from significant partisan disagreements, preventing Congress from approving a crucial funding bill for the 2026 fiscal year.
The core conflict involved a continuing resolution for temporary funding. Republican lawmakers advanced this resolution without including additional policy requests from Democratic members, led by Senator Chuck Schumer, who pushed for extending Affordable Care Act tax credits to secure healthcare for millions.
Following the shutdown announcement, Bitcoin (BTC) rose by 2.9% within 24 hours, reaching approximately $116,427. Concurrently, gold prices increased by 0.7%, reflecting an uptick in demand for traditional safe assets amid the government funding uncertainties.
Source: Congressional Research Service and Cointelegraph data
Experts suggest that both Bitcoin and the S&P 500 could benefit from the shutdown, anticipating a period of lower US interest rates. Ryan Lee, chief analyst at Bitget, believes Bitcoin’s resilience against political risks makes it increasingly attractive to mainstream investors. He also noted key altcoins may have already bottomed out.
Bitcoin reclaiming the $116,000 mark signals optimism for the broader crypto market entering October, a month often positive historically for cryptocurrencies.
Historical reactions of equity and crypto markets to government shutdowns have varied. The 2013 shutdown caused stock declines but Bitcoin saw gains, while the 2019 shutdown corresponded with falling values for both.
Previous shutdowns have led the US Federal Reserve to adopt more dovish interest rate policies, resulting on average in a 13% annual increase for the S&P 500, according to trading analysis from the Kobeissi Letter.
Market sentiment sometimes surprisingly welcomes shutdowns as potential catalysts for easing monetary conditions.
Prediction market data shows a 38% probability the current shutdown might resolve by October 15, reflecting market uncertainty about the political outcome.
- US government shutdown has boosted Bitcoin and gold prices
- Political stalemate blocks 2026 fiscal year funding bill
- Experts suggest potential crypto market bottom and lower US interest rates
- Historic shutdowns show mixed equity and crypto market reactions
- Market anticipates resolution in mid-October with increasing investor optimism
Stay informed on how evolving political events impact crypto markets to make smart investment decisions during volatile times.
