Bitcoin (BTC) climbed to a two-week high on Wednesday after the US government shutdown began, though traders remain wary given the cryptocurrency’s 9% drop during the 2018 shutdown.
The shutdown started on October 1st after Republicans and Democrats failed to reach an agreement, with the former demanding provisions and restoring funding to federal programs like Medicaid, and the latter rejecting any negotiations.
Read more: Polish Parliament Advances Strict Crypto Market Regulation Bill
Hundreds of thousands of employees were sent home and a new Senate vote is pending. The Trump administration has warned of potential mass layoffs if the impasse drags on.
When these events take place, safe-haven assets like gold usually explode, and this was no exception. Gold was lifted to a record US$3,895 (AU$5,920) per ounce, while 10-year Treasury yields fell as investors shifted into government debt. US stocks showed little initial reaction, though ADP data signaled a weakening labor market with 32,000 fewer private payrolls in September.
When it comes to crypto, well, history shows some mixed outcomes. In December 2018, Bitcoin fell from US$3,900 (AU$5,920) to US$3,550 (AU$5,390) during the 35-day shutdown, though broader equity markets rebounded within a month.
This time, however, it looks like Bitcoin and the crypto market remain steady. BTC even jumped 4.4% in the last 24 hours, currently trading at US$119.2K (AU$180K), though the real winner today is Zcash with a massive 60% surge.
A US government shutdown directly stalls the SEC’s work. Staff are furloughed, so spot ETF applications cannot be properly reviewed, commented on, or approved. In other words, this means deadlines freezes and any new ETF proposals submitted during the shutdown sit idle until operations resume.
While demand for crypto ETFs may continue, the regulatory bottleneck delays new approvals and prolongs uncertainty.
So a shutdown doesn’t cancel crypto ETF applications, but it does halt progress until government funding is restored, while causing uncertainty in the market.
Related: SEC Gives Green Light to DePIN Tokens in Rare No-Action Letter
The post U.S. Government Shutdown Freezes Crypto ETF Approvals at SEC appeared first on Crypto News Australia.
