The risk of a US government shutdown and its impact on Bitcoin

BTC0.01%

The probability of a U.S. government shutdown before mid-February has surged to 85%, reflecting deadlock in budget negotiations in Washington, D.C. If Congress fails to reach an agreement before the deadline, a series of economic consequences could occur, such as federal employee furloughs and disruptions to essential public services. As a result, financial markets face the risk of significant volatility as investors closely monitor the political developments.

Typically, during periods of instability, capital tends to flow into safe-haven assets. However, Bitcoin currently maintains a relatively narrow trading range, indicating a higher level of stability compared to previous crises. Nonetheless, the long-term impact depends on the duration of the shutdown, the economic effects, and investor confidence in Bitcoin’s role as a store of value.

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