In the first quarter of 2023, the Bitcoin price had a stimulus for a much needed rally in the form of the US regional banking crisis caused due to bank runs for influential institutions like the Silicon Valley Bank. Similarly, the crypto ecosystem may likely be headed towards a bull run situation if the US government shutdown comes to effect on October 1, 2023.
Also Read: Ethereum Price Prediction As The SEC Delays Decisions On ETFs From Ark, VanEck
BTC Price Vs Banking Unrest
In the context of the US government shutdown concerns, the BTC price showed some signs of uptrend. According to analysts quoted by Bloomberg, the price rise could be a sign of uncertainty around further unrest in the US banking sector. Stephane Ouellette, co-founder of FRNT Financial, said the Bitcoin rally can be seen as a safety hedge against further banking unrest.
This is also in line with a recent comment by the US Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg, who said that the banking industry remains exposed to significant downside risks from inflation and high interest rates. With this, any price breakout from the $30,000 milestone could be a psychological win for Bitcoin traders, as the fear, uncertainty and doubt (FUD) could catch up with the after effects of the US shutdown.
Another Bitcoin price prediction from James Butterfill, head of research at a crypto asset manager, reveals the likelihood of a price jump for the top cryptocurrency in case of the shutdown. He said,
“This scenario bears resemblance to the debt ceiling stalemate experienced earlier this year, which ended up bolstering Bitcoin prices.”
Downside For Crypto
While the shutdown may come as a crucial trigger for a BTC price rally, it could also mean a liquidity crunch for crypto businesses. Also, the US SEC maybe plagued with the shortage of staff at a time when the agency is preparing to approve the Ethereum futures ETFs. Earlier, CoinGape reported that the Valkyrie Bitcoin and Ether ETF launch could be advanced due to the SEC’s measures in preparation for the potential shutdown.
