Bitcoin Volatility Rises Amid Government Shutdown as Analysts Warn of Deficit Risks

Core Insights - The surge in Bitcoin, gold, and stock prices is accompanied by short-term volatility and concerns over the growing U.S. deficit [1][2] - The U.S. budget deficit is projected to reach $1.9 trillion by 2025, with current figures showing a deficit of $1.973 trillion, a $76 billion increase from the previous fiscal year [2] Bitcoin Market Dynamics - Bitcoin has experienced a slight decline of about 0.8% recently, trading at $122,000 after reaching an all-time high above $126,000 earlier in the week [3] - The S&P 500, Nasdaq 100, gold, and silver have outperformed Bitcoin during this period [3] - Bitcoin's correlation with other assets has turned positive, suggesting it may catch up to these assets in the coming weeks [4] Volatility Trends - The Bitcoin volatility index has increased from 0.88% to 1.17% since the U.S. government shutdown, indicating a rise in price fluctuations [5][6] - Current volatility levels are comparable to those from a month ago but significantly lower than the spike to 2.87% seen in late March [6] ETF Inflows and Market Support - Bitcoin ETF inflows have matched last week's figures, with $2.7 billion in new funds reported this week [7] - The crypto market is expected to remain volatile but supported, particularly for Bitcoin, as long as ETF flows remain positive and no new macroeconomic shocks occur [7]