What to expect from crypto as US government shutdown ends?
The U.S. government shutdown has officially ended after 43 days, bringing relief to both traditional and crypto markets. Bitcoin hit a weekly high of $106,658 before stabilizing at $101,000, while Ethereum briefly broke $3,600 before retreating to $3,400. Bitcoin ETFs also saw $500 million in inflows, ending a five-day streak of negative flows. Despite the improved sentiment, experts remain cautiously optimistic about the market's future, with concerns tied to ETF applications and macroeconomic factors. The shutdown had disrupted services and affected over 800,000 workers, exacerbating risk-off sentiment in the markets but also resetting leverage and preparing for potential institutional entry.
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Impact of Shutdown on the Markets
Experts believe that the end of the shutdown will bring relief to the crypto market, but traders are likely to remain cautious in the near future.
The U.S. government shutdown negatively affected both stocks and crypto markets, leading to disruptions in macroeconomic conditions. Despite this, as the shutdown ends, the outlook seems slightly more positive.
Bitcoin and Ethereum React to Shutdown News
After 43 days of the longest government shutdown in U.S. history, Bitcoin (BTC) reached its weekly high of $106,658 before rebounding to $101,000. Similarly, Ethereum (ETH) briefly rose above $3,600 before stabilizing at $3,400.
This demonstrates a mixed sentiment within the market, as optimism grows but caution persists.
Inflow Trends for Bitcoin ETFs
As market sentiment improved, Bitcoin ETFs broke their 5-day streak of negative flows, registering $500 million in inflows. This marks a potential shift in momentum for the crypto market.
Notably, Bitcoin's performance is being closely monitored amid evolving economic conditions.
Expert Opinions on the Shutdown's Impact
The shutdown, which disrupted services for over 800,000 federal workers, was a key factor negatively impacting the crypto market. However, experts are cautious about overly optimistic forecasts:
- Lacie Zhang, Research Analyst at Bitget Wallet, said the shutdown exacerbated the risk-off trend driven by "cooling momentum in AI trade and ETF outflows." Yet, she believes the correction was structurally healthy and could pave the way for institutional reinvestment.
- Arthur Azizov, Founder at B2 Ventures, noted that while the market isn't showing much excitement yet, he is cautiously optimistic. He sees potential for a market boost once the shutdown’s economic effects stabilize, with ETF applications being a pivotal factor.
Lingering Questions After the Shutdown
The main concern remains: what comes next for the crypto markets? While sentiment has slightly improved, the caution among traders reflects ongoing uncertainty. The potential for a liquidity storm has been highlighted by some analysts, suggesting the need for vigilance moving forward.