- The price of Bitcoin received a warning for a much-needed rally in the form of a regional banking crisis in the United States, caused by bank runs for influential institutions like Silicon Valley Bank.
- According to analysts quoted by Bloomberg, the price increase could be a sign of increased uncertainty surrounding the U.S. banking sector.
- Another Bitcoin price prediction from James Butterfill suggests the possibility of a price spike for the top cryptocurrency in the event of a shutdown.
While the US government is facing the danger of shutting down, it is a matter of curiosity what will happen to the price of Bitcoin: Will this event increase the price of BTC?
Bitcoin Could Rise After Developments in the U.S.
In the first quarter of 2023, the price of Bitcoin received a warning for a much-needed rally in the form of a regional banking crisis in the United States, caused by bank runs for influential institutions like Silicon Valley Bank. Similarly, if the U.S. government shutdown, which is possible on October 1, 2023, occurs, the crypto ecosystem may likely shift towards a bull market.
In the context of concerns about a U.S. government shutdown, the price of BTC showed some signs of an increase. According to analysts quoted by Bloomberg, the price increase could be a sign of increased uncertainty surrounding the U.S. banking sector. Stephane Ouellette, one of the co-founders of FRNT Financial, mentioned that the Bitcoin rally could be seen as a hedge against further instability in the banking sector.
This is also in line with recent comments from Martin Gruenberg, the Chairman of the Federal Deposit Insurance Corporation (FDIC). Gruenberg stated that the banking sector is exposed to significant downward risks from inflation and high interest rates. Therefore, any price surge beyond the $30,000 milestone could be a psychological victory for Bitcoin traders, as fear, uncertainty, and doubt (FUD) could set in after the shutdown, along with the effects of the U.S. shutdown.
Another Bitcoin price prediction from James Butterfill, the Research Chief at a crypto asset management firm, suggests the possibility of a price spike for the top cryptocurrency in the event of a shutdown. He said:
“This scenario resembles the debt ceiling debacle we saw earlier this year and managed to support Bitcoin prices.”
Possible Risks for Crypto
While a shutdown could serve as a critical trigger for a BTC price rally, it could also mean liquidity crunches for crypto businesses. Additionally, it may coincide with a period when the SEC is preparing to approve Ethereum futures trading ETFs, which could cause staff shortages at the agency. COINOTAG previously reported that the launch of Valkyrie Bitcoin and Ethereum ETFs could be highlighted due to possible shutdown measures by the SEC.
