The U.S. government officially closed at midnight after Congress was unable to pass a new funding bill.
While Wall Street experienced a sell-off in early trading, Bitcoin surged to new heights above $118,000.
At 12:01 a.m., the funding bill that had maintained government operations expired, causing significant portions of the federal government to shut down. Social Security beneficiaries, federal employees, and travelers will feel the immediate impact, while the markets are already showing signs of strain.
Bitcoin experienced stagnant trading in recent months, but key liquidity indicators suggest a potential breakout may be imminent. Trends in global M2 growth, stablecoin supply, and gold’s rally—closely followed by Bitcoin with a 40-day delay—all indicate upward momentum, with some analysts targeting $150,000 by early November.
Futures for the three major U.S. indexes pointed downward today ahead of the opening bell in premarket trading: the S&P 500 was down 0.58%, Dow futures dropped 0.52%, and Nasdaq futures fell by 0.67%.
Additionally, alongside Bitcoin’s price increase, gold reached an all-time high above $3,900 an ounce as investors sought safe-haven assets.
Government Blackout?
Markets are also facing a sudden halt in government statistics. The shutdown means the Bureau of Labor Statistics will not publish weekly jobless claims or the September payrolls report. Inflation data expected in mid-October may also be postponed if the impasse continues.
This week’s economic outlook is uncertain, with no jobs report on Friday, leaving the Federal Reserve to make rate decisions without complete data. Economists caution that each week of government shutdown could reduce GDP growth by 0.1–0.2 percentage points, with a closure lasting a quarter potentially cutting 2.4 points off Q4.
In the midst of this uncertainty, Bitcoin is assuming gold and traditional Wall Street’s role.
The cryptocurrency has seen a notable increase, climbing over 25% year-to-date, spurred by institutional adoption and an enhanced view as a hedge against inflation and political risk.
The critical question is how long this momentum will persist. Historically, markets tend to recover quickly from shutdowns, with equities ending positively in more than half of the 20 shutdowns since 1976. However, concerns about benefit cuts and layoffs could elevate risks this time around.
Bitcoin is currently trading at $118,193.
