Bitcoin Update: Government Shutdown Drains $700 Billion, Hastening Bitcoin's Downward Trend
- U.S. government shutdown drained $700B from markets via TGA, pushing Bitcoin down 19% amid liquidity crisis. - Political deadlock persists despite post-election optimism, with Senate failing 14th shutdown resolution attempt. - Interior Secretary Doug Burgum faces criticism for promoting oil exports during crisis as parks suffer furloughs. - Crypto firms expand amid turmoil, while Fed's SRF records surging usage as markets await shutdown resolution.
Analysts report that the ongoing U.S. government shutdown, which has now matched the record for the longest in history at 35 days, has intensified a liquidity crunch, pulling $700 billion out of financial markets via the Treasury General Account (TGA).
Since starting on October 1, the shutdown has brought federal operations to a halt and interrupted services such as food assistance. Lawmakers from both sides are looking to Tuesday’s elections as a possible turning point to resolve the deadlock, according to
At the same time, Interior Secretary Doug Burgum has faced backlash for embarking on a high-profile trip to the Middle East and Europe to promote U.S. oil and gas exports, while national parks suffer from closures and staff furloughs. Democrats have accused him of neglecting his duties during the shutdown, according to
The cryptocurrency sector, already under pressure from broader economic challenges, is facing new obstacles. BitMEX analysts believe the shutdown has sped up a correction in Bitcoin’s four-year bull run, which was previously expected to peak in 2024 with the launch of U.S. spot Bitcoin ETFs and the halving event. They note that the current volatility mirrors past cycles, where Bitcoin typically reaches a high near the cycle’s end before dropping 70-80% the following year.
Despite the market slump, crypto businesses are still growing. Jackbit, a crypto casino that doesn’t require KYC, has announced plans to expand globally in 2025, using AI-powered personalization and instant payouts through smart contracts to boost user engagement, according to
The Federal Reserve’s Standard Repo Facility (SRF) has emerged as a key measure of the liquidity squeeze, with increased usage signaling cash shortages among banks. BitMEX analysts remain optimistic about a sharp market rebound once the shutdown ends, expecting a surge of liquidity to return and coincide with Bitcoin’s seasonal uptrend.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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