Takeaways from the conference:
-
The yields of US Treasury 10-year bonds declined. This reflects a growing risk-aversion, and demonstrates heightened demand for assets that are considered safe havens.
-
Spot Bitcoin ETFs saw inflows of $430 million while stocks remained quiet, indicating a possible decoupling with traditional markets.
BitcoinBTCThe dollar reached its highest level in two weeks on Wednesday after the United States government shut down. Investors remain cautious as they recall that in 2018, the shutdown caused a drop due to concerns over a slower economy.
As there is no agreement, agencies are forced to take contingency actions, which means that hundreds of millions of workers will be staying home. Another Senate vote is scheduled on Wednesday to determine the length of this shutdown.
Trump has threatened to lay off thousands of workers if an agreement cannot be reached. The threat has led traders to be more conservative and less risky.
Earnings of the US 10-year Treasury The price of debt backed by the government fell Wednesday. This shows that traders were willing to accept a lower return in exchange for safety. Gold prices also rose to an all-time high of $3,895 for one ounce.
The shutdown may have temporarily boosted Bitcoin’s value, but its long-term sustainability remains in doubt. US stocks showed no immediate response, but ADP’s data showing 32,000 less private payrolls for September and revised August numbers that show a loss of 3,00 jobs was a pressure.
Bitcoin fell 9% in the US Government Shutdown of 2018.
Bitcoin decreased by 9% in December 2018 when the US shutdown. The economic slowdown could be felt quickly this time as the government’s spending is expected to drop sharply, and official data will take longer to release.
Just 10 days before Dec. 22nd, 2018, the US stock market experienced a 12% decline. The full drop was reversed within a little over a month. Investors who maintained their position and ignored short-term fluctuations ultimately ended up winning.
Bitcoin’s price fell from $3.900 to $3.550 over the course of the 35-day shutdown in December 2018. Even though the crypto faced bigger challenges back then, it already fell 42% over the last two weeks before Nov. 25th, 2018. The sharp drop in cryptocurrency prices was attributed by some analysts to stricter regulation.
The Financial Action Task Force, or FATF (Financial Action Task Force), held its October 2018 meeting. updated its guidelines The act covers virtual asset activities, such as cryptocurrency exchanges and some wallet providers. This intergovernmental organization, which is composed of 200 countries, has a mandate that focuses on anti-money laundering and counter-terrorism funding. The traders may have expected heightened regulation scrutiny.
Related: US Senate to hold hearing on crypto taxes as IRS offers relief on corporate tax
This $430,000,000 in net inflows into spot Bitcoin ETFs The recent separation of the asset from equity has strengthened its reputation as a hedge. They now control nearly $147billion in assets. Meanwhile, gold is supported by $461billion through ETFs, representing a market of $26trillion.
The current conditions indicate that the shutdown of the federal government could be favorable to Bitcoin in the coming 30 days, despite the fact that short-term weakness on traditional markets is a concern. In a time of uncertainty, the continued demand from corporations for Bitcoins as reserve assets will play an important part in maintaining bullish momentum.
The information contained in this article is meant to provide general knowledge and not as a legal or investment advisory. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: cointelegraph.com
