Takeaways from the conference:
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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.
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Spot Bitcoin ETFs saw inflows of $430 million while stocks remained quiet, indicating a possible decoupling with traditional markets.
BitcoinBTC( ) hit a new two-week peak on Wednesday, following the shutdown of the United States Federal Government. Investors remain cautious as they recall that in 2018, the shutdown caused a drop due to concerns over a slower economy.
Without a resolution, agencies ordered contingency actions, which forced thousands of federal employees to work from home. The focus now shifts to the duration of the shutdown with a Senate vote set for Wednesday.
Trump’s administration warned that it could pursue mass layoffs in the event of a failure to reach an agreement. This has caused traders to become more risk-averse and cautious.
Earnings from the US 10-year Treasury The price of debt backed by the government fell Wednesday. This shows that traders were willing to accept lower return in exchange for safety. The price of gold also soared, reaching a new record at $3,895 an ounce. This indicates a stronger demand for hedges.
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 indicating a loss of 3,000 positions was a pressure.
Bitcoin dropped 9% due to the US shutdown in 2018.
Bitcoin decreased by 9% in December 2018 when the US shutdown. This time the slowdown in government spending and delays with the official release of data could cause an economic slump to surface.
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 stayed the course and didn’t worry about short-term fluctuations ended up winning.
Bitcoin’s price fell from $3.900 to $3.550 over the course of the 35-day shutdown in December 2018. In spite of this, Bitcoin faced greater challenges, as it had already fallen 42% during the previous two weeks, leading up to November 25, 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. Intergovernmental organisation representing about 200 jurisdictions. Its mandate is Anti-Money Laundering, and Counter-Terrorism Financing. Some traders might have been expecting increased regulatory 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. The vehicles manage $147 billion worth of assets. Gold, which is a market valued at $26 trillion, provides $461 billion via ETFs.
The current conditions indicate that the shutdown of the federal government could be favorable to Bitcoin in the coming 30 days. This is even though short-term weakness on traditional markets will continue. The continued corporate demand for Bitcoin to be used as a safe-haven asset will also play a major role in sustaining bullish momentum.
This is a general article and not intended as investment or legal advice. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.
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Source: cointelegraph.com
