In a recent tweet, crypto educator CryptoBusy explained how a US government shutdown will push investors toward Bitcoin “as a hedge against economic uncertainty.”
🚨 Nov 17 is the new deadline for a US Government shutdown. Why is it positive for #Bitcoin ?
– Safe haven asset: Investors may turn to #BTC as a hedge against economic uncertainty and inflation during a shutdown.
– Reduced Regulation: With government agencies temporarily… pic.twitter.com/at7pLAPfCm
— CryptoBusy (@CryptoBusy) October 10, 2023
The BBC reported how the US government prevented a federal shutdown by reaching an agreement on a short-term funding deal on October 1. US President Joe Biden signed the bill into law, ensuring funding until November 17.
The Twitter influencer shared that during a government shutdown, investors might view BTC as a “safe haven asset” against inflation. Moreover, amidst the temporary inactivity of government agencies, crypto can potentially experience fewer regulatory restrictions.
Additionally, CryptoBusy emphasized the vulnerability of fiat currencies by noting:
This also highlights the instability of traditional fiat currencies, boosting interest in decentralized cryptos like BTC.
In the last week of September, when traders became more optimistic about the possibility of a U.S. government shutdown, Bitcoin and other cryptocurrencies saw an increase in value. In just 24 hours, Bitcoin’s price rose by 2%, surpassing the $27,000 mark and pushing it past the $26,000 level, where it had been trading for over a month. At the time of writing, the leading crypto is trading at $27,516, according to data from CoinMarketCap.
Crypto trader Mike Alfred implied a correlation between the U.S. government’s policies and Bitcoin price actions in response to Biden’s announcement about the cancellation of $127 billion in student debts for over 3.7 million Americans.
In 2021, during the COVID-19 lockdown, the U.S. government provided support to individuals and businesses through a $1.9 trillion package. This boosted the crypto market with a growth in investment, resulting in a trillion-dollar market cap and Bitcoin hitting an all-time high of around $65,000.
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