Bitcoin price hits two-month high amid US shutdown

Bitcoin (BTC-USD) climbed to its highest level in more than two months on Thursday as the US government officially shut down.

The world’s largest digital asset by market capitalisation rose by around 3.5% in the past 24 hours, briefly touching $119,455 (£88,516) before pulling back to now change hands for around $118,500. This marks bitcoin's (BTC-USD) strongest price since mid-August.

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Other major tokens, including ethereum (ETH-USD), XRP (XRP-USD) and solana (SOL-USD), gained by 5.5%, 4% and 6% respectively over the past day.

The global cryptocurrency market cap today is $4.17tn, an increase of 4.0% in the last 24 hours. Bitcoin (BTC-USD) dominance is at 56.7% and ethereum (ETH-USD) dominance is now at 12.7%, showing that bitcoin is still the strongest asset in terms of investor appetite.

CCC - CoinMarketCap•USD

(BTC-USD)

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118,677.84

+2,461.03

+(2.12%)

As of 9:22:00 AM UTC. Market Open. Advanced Chart

The rally coincided with the US government’s failure to reach a funding agreement, forcing agencies to close and furloughing roughly 750,000 workers at a daily cost of an estimated $400m.

The shutdown also halts the release of key economic data, including Friday’s closely watched nonfarm payrolls report, a development that could delay monetary policy signals and alter risk sentiment.

Read more: What price will bitcoin be by Christmas?

“The US shutdown injects a new variable, removing critical macro data and amplifying uncertainty,” said Timothy Misir, head of research at BRN. “Options markets already reflect this fragility, with traders hedging for drawdowns. At the same time, bitcoin (BTC-USD) options remain cheap relative to realized volatility.”

In other words, investors are paying for protection against a sharp drop in bitcoin (BTC-USD), but that insurance is still relatively inexpensive given how volatile the cryptocurrency has been. This points to a market that is on edge, preparing for turbulence, while also leaving room for traders to cheaply bet on big price swings.

Hard assets are now in focus

Gold (GC=F) has also been a major beneficiary of the mounting fiscal and political stress in the US. The precious metal closed September with a 12% monthly gain, its strongest rally since 2011, underscoring a broader investor shift into hard assets as Federal Reserve officials continue to warn that inflation remains “too high.”

This comes as New York Fed president John Williams reiterated that rate cuts remain contingent on incoming data, data that may now be delayed by the shutdown.

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Crypto, meanwhile, is caught between supportive inflows and cautious derivatives positioning. Exchange-traded funds (ETF) inflows have provided a cushion, with bitcoin (BTC-USD) spot ETFs recording $676m in net inflows on Wednesday, marking a third consecutive day of gains. Ethereum (ETH-USD) spot ETFs saw $80.79m in inflows over the same period.

Story Continues

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(ETH-USD)

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4,391.12

+107.51

+(2.51%)

As of 9:22:00 AM UTC. Market Open. Advanced Chart

Also, some analysts argue the shutdown’s market impact may be overstated. "On fiscal theatre, a US government shutdown should be a market non-event beyond data delays and headline noise,” QCP Capital analysts wrote.

“Essential services continue, back-pay limits income effects, and past episodes have not derailed risk assets. During the 35-day 2018–19 shutdown, the S&P 500 rose nearly 10%. Given bitcoin’s (BTC-USD) high beta to equities, we see shutdown-related dips as buying opportunities rather than chasing gap-ups.”

Historically, October is one of bitcoin’s strongest months

Over the past 12 years, bitcoin (BTC-USD) has posted gains in 10 October's, with returns ranging from +10% to nearly +40%. Seasonality also favours the broader fourth quarter, with the cryptocurrency rising in four of the past five Q4 periods.

CryptoQuant analyst Alex Adler Jr. noted that bitcoin’s (BTC-USD) current market setup shows the asset in “equilibrium with growth potential” toward $130,000. “The upper boundary of this range currently runs around $130,000 and serves as a zone where short-term holders more actively lock in profits,” Adler wrote.

With bitcoin (BTC-USD) already pushing to two-month highs, historical seasonality and technical positioning suggest upside momentum could continue into year-end.

Read more:

Why pension funds are buying bitcoin What is a spot bitcoin ETF and why has it sparked a crypto rally? How AI could change the internet

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