Good Morning, Asia. Here’s what’s trending in the markets:
Welcome to Asia Morning Briefing, your daily recap of significant stories during the U.S. hours along with an overview of market activities and insights. For a comprehensive look at U.S. markets, refer to CoinDesk’s Crypto Daybook Americas.
Prediction market participants are becoming increasingly certain that a U.S. government shutdown will be historic. Contracts on Polymarket and Kalshi are forecasting a government reopening after 40 days, exceeding the previous 35-day record from 2019.
Traders on Polymarket predict the highest likelihood for resolution around November 15, while Kalshi’s duration market estimates an average shutdown length of 41.6 days, leading to a potential reopening on November 11.
Despite much of Washington coming to a standstill, with nearly a million federal workers either furloughed or working without compensation, the Federal Reserve is unaffected. The central bank operates independently from Congress-approved funding, so it can continue its policy meetings and rate adjustments during a shutdown.
Polymarket bettors assign a 96% probability to a 25-basis-point cut at the upcoming October 29 FOMC meeting, followed by an 85% probability of an additional quarter-point cut in December.
The main concern is informational; with delays in jobs, inflation, and GDP reports, the Fed may have to implement back-to-back cuts based on incomplete data.
Interestingly, the last extended shutdown from 2018 to 2019 coincided with Bitcoin’s bear market low, when BTC fell just above $3,000 before rebounding strongly post-reopening.
This time, the shutdown coincides with record gold prices, now over $4,200 per ounce, and a significant $20 billion crypto leverage flush that has reset derivatives markets.
Market Movement
BTC: Bitcoin is priced above $108,000, down 1.8% as traders took profits on weekend gains and risk sentiment declined amid renewed macro uncertainty and waning ETF inflows affecting digital assets.
ETH: Ethereum is testing the $4,100 resistance as treasury firms SharpLink and BitMine increase their accumulation, collectively purchasing $278 million in ETH over the past week amid market consolidation.
Gold: Gold decreased by 5.5% to $4,121.50, and silver fell 7.5% to $48.37, witnessing their sharpest single-day declines in years as traders booked profits after a strong rally, although analysts agree that both metals are still in robust long-term trends.
Nikkei 225: Japan’s Nikkei 225 gained ground following data showing a 4.2% year-on-year increase in exports for September, breaking a four-month streak of decline as stronger shipments to Asia offset waning demand from the U.S., with imports up 3.3%, exceeding forecasts.
