Government Shutdowns Have Meant Crypto Bloodbaths: Bad News Ahead For Bitcoin, Ethereum?

Core Insights - The U.S. federal government shutdown has negatively impacted leading cryptocurrencies, causing a decline in their values and raising concerns about the market's short-term outlook [2][3]. Market Impact - The shutdown, the first since 2018-19, could temporarily halt some government services and furlough hundreds of thousands of federal workers, leading to a drop in stock futures and major cryptocurrencies like Bitcoin and Ethereum [2]. - Bitcoin experienced a significant decline, shedding over 10% of its value during this period, while Ethereum remained largely unchanged [3]. Historical Context - The last government shutdown lasted from December 22, 2018, to January 25, 2019, resulting in approximately 800,000 unpaid workers and a GDP drop of around $3 billion [2]. - During the previous shutdown, Bitcoin's price fell from $4,014.18 to $3,599.77, a decrease of 10.32%, while Ethereum's price changed minimally from $116.76 to $116.38, a drop of 0.32% [4]. Previous Shutdowns - In a brief shutdown from January 20 to January 22, 2018, Bitcoin and Ethereum saw steeper declines of 15.25% and 13.14%, respectively [5]. - Historical data indicates that corrections following shutdowns have often led to strong returns, with Bitcoin surging 249.001% and Ethereum increasing by 190% in the months following the 2018-19 shutdown [6]. Analyst Recommendations - A cryptocurrency analyst has suggested that the current shutdown presents a buying opportunity for Bitcoin, indicating that it could lead to a final capitulatory low in the ongoing correction [7].