The U.S. federal government shut down at midnight, sending leading cryptocurrencies lower and raising concerns about the market’s short-term outlook.
Shutdown Shakes Cryptos, Stocks
The shutdown, the first since 2018-19, could halt some government services temporarily and furlough hundreds of thousands of federal workers.
The development shook markets, with stock futures and leading cryptocurrencies like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) trading lower.
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A Historical Analysis
The last shutdown, which started on December 22, 2018, and went until January 25, 2019, was the longest in U.S. history. The shutdown resulted in around 800,000 workers being unpaid for a month, and the GDP dropped by approximately $3 billion.
Bitcoin, the world’s largest cryptocurrency by market capitalization, shed over 10% of its value in this period. Ethereum, in contrast, was largely unchanged.
Prior to this, the government experienced a brief three-day shutdown from January 20. 2018 to January 22, 2018. The two heavyweights witnessed a steeper fall this time around, crashing 15.25% and 13.14%, respectively.
However, the corrections have historically preceded strong returns.
Bitcoin surged to $12,571 in the six months following the 2018-19 shutdown, representing a staggering 249.001% increase. Similarly, Ethereum surged 190% in the five months following the shutdown.
Time To Buy The Dip?
Widely followed cryptocurrency analyst Bren urged buying Bitcoin on any shutdown-fueled dip.
“A shutdown would really be the perfect scenario for a final capitulatory low in this correction,” they added.
Price Action: At the time of writing, BTC was exchanging hands at $114,459, up 0.03% in the last 24 hours, according to data from Benzinga Pro. ETH traded down 1.04% at $4,144.00 at last check.
Photo Courtesy: artjazz on Shutterstock.com
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Government Shutdown Looms: What It Means For The Economy BTCGrayscale Bitcoin Mini Trust (BTC) Common units of fractional undivided beneficial interestNot Available-%Overview$BTCBitcoin – United States dollar$114515.990.39%$ETHEthereum – United States dollar$4141.57-0.11%$SHIBShiba Inu – United States dollar$0.0000120.51%Market News and Data brought to you by Benzinga APIs
