Bitcoin doesn’t seem to care that the US government is shut down. While Republicans and Democrats continue their standoff into a second week, the world’s biggest cryptocurrency has been on an absolute tear, jumping 12% touching a new all-time high at $122,434.
Four experts pointed to something called “the debasement trade.” Basically, investors are losing faith in traditional government-backed systems and piling into assets like Bitcoin that operate independently. The shutdown itself is just another symptom of deeper political dysfunction that’s shaking people’s confidence in the US dollar.
Bitwise’s Juan Leon explained that Bitcoin ETFs have pulled in over $2.3 billion since late September, showing real institutional money is behind this move. Meanwhile, James Gernetzke from Exodus wallet thinks markets don’t believe the shutdown will cause long-term economic damage, so traders expect the Fed to keep cutting rates, which is great news for Bitcoin.
Gold hitting record highs is also playing a role here. When the precious metal rallies on concerns about currency stability, Bitcoin historically follows a few months later. Alexander Blume from Two Prime pointed out that excess spending, geopolitical chaos, and stubborn inflation are all making people question the dollar’s long-term value.
The big question now is whether this rally can continue or if we’re due for a pullback. Leon admitted a correction is possible if the shutdown drags on long enough to create serious risk-off sentiment across all markets.
Conclusion
Bitcoin surged 12% during the US government shutdown as experts credit the “debasement trade” and $2.3 billion ETF inflows, though a prolonged political crisis could trigger a correction.
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