Bitcoin and Crypto Surge as US Goverment Enters Shutdown – But History Warns of Potential Reversal
Washington D.C. – November 15, 2023 – Major cryptocurrencies are experiencing a rally as the U.S. government officially began a partial shutdown today. XRP led the gains, rising 3.1% to $2.93, while Dogecoin jumped 5.2% and Solana increased 4.81% as of this writing. the surge is prompting questions about whether this trend will hold, given past precedent.
The price increases are likely fueled by investors seeking “safe-haven” assets amid the economic uncertainty created by the government closure. Traditionally, gold has been the go-to safe haven during turbulent economic times. Though,cryptocurrencies have increasingly been viewed as alternatives in recent years,particularly when political instability threatens traditional markets.
Despite the current positive momentum, experts caution against overconfidence. The behavior of Bitcoin during the last notable U.S. government shutdown - between December 22, 2018, and January 25, 2019, the longest on record – offers a cautionary tale.
Initially, Bitcoin saw a boost during the early days of the 2018-2019 shutdown. Opening at $3,898 on December 22, 2018, it closed above $4,014 that day and climbed to an intraday high of $4,271 on December 24. Though,this upward trend proved short-lived.
According to Yahoo Finance data, Bitcoin steadily declined over the following month, closing below $3,600 by January 25, 2019 – representing a roughly 10% loss in value during the shutdown period.
While past performance is not indicative of future results, this history highlights the potential for significant price fluctuations throughout the course of a government shutdown, with early gains possibly giving way to later declines. Investors are advised to proceed with caution as the current shutdown unfolds.
