Bitcoin Rally Accelerates Amid U.S. Government Shutdown
Bitcoin surged on Friday to trade at approximately $123,874, bringing it within 1% of its all-time high near $124,000 set in mid-August. This advance marks a roughly 2% gain on the day and a substantial 12% increase over the past week.
The rally coincides with the U.S. government entering its third day of shutdown after federal lawmakers failed to agree on funding. Investors are increasingly viewing Bitcoin as a refuge amid mounting political and economic uncertainties.
Market Context and Investor Behavior
The current government shutdown has heightened risk perceptions, prompting traders to seek alternative assets. Bitcoin’s recent price action reflects this shift, contrasting with its muted response during the 2018-2019 shutdown.
“The shutdown matters this time around,” commented Geoff Kendrick, Head of Digital Assets Research at Standard Chartered. “During the previous Trump shutdown (December 2018 to January 2019), Bitcoin was in a different phase and showed little reaction. This year, Bitcoin is trading in close relation to U.S. government risks, notably correlated with the U.S. Treasury term premium.”
Standard Chartered’s analysis suggests Bitcoin may soon surpass its previous peak, with forecasts indicating a potential rise to $135,000 post-breakout.
Broader Asset Movements Amid Political Uncertainty
Alongside Bitcoin’s rally, other traditional safe-haven assets have seen price appreciation. Spot gold rose 0.5% on Friday, reaching $3,876.55 per ounce, accumulating gains of over 2% for the week.
Equity markets demonstrated resilience despite geopolitical risks, with the S&P 500 and Nasdaq Composite rising 0.5% and 0.27%, respectively, on Friday.
FinOracleAI — Market View
Bitcoin’s proximity to its all-time high amid the ongoing U.S. government shutdown underscores its evolving role as a hedge against political and fiscal uncertainty. This shift is supported by correlations with government bond risk premiums and growing institutional interest.
- Opportunities: Potential breakout above $124,000 could attract further inflows from risk-averse investors.
- Risks: Prolonged government shutdown or abrupt resolution could cause volatility in safe-haven demand.
- Market Dynamics: Continued geopolitical tensions may sustain demand for decentralized assets and precious metals.
- Technical Outlook: Momentum indicators suggest bullish continuation, with key resistance near $135,000.
Impact: Positive — Bitcoin is consolidating its status as a viable safe-haven asset, with upside potential linked to ongoing U.S. fiscal and political risks.
