Bitcoin experienced an increase on Wednesday, defying the downward trend seen in many other risk assets. This uptick came in the wake of a government shutdown in the United States, as lawmakers were unable to agree on a funding bill. The events shed light on the cryptocurrency’s shifting perception as a reliable store of value during times of geopolitical uncertainty, akin to gold’s recent surge to a record high.
As of 6:53 a.m. ET, Bitcoin traded 1.8% higher, reaching $116,283. This marks a 3% rise over the past 24 hours. The shutdown, which took effect at midnight, followed a failed Senate bill aimed at continuing government funding. This legislative deadlock has been attributed to the ongoing efforts of Democrats, led by Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries, who are advocating for an extension of enhanced tax credits under the Affordable Care Act.
Amid the turmoil, former President Donald Trump warned of potential cuts to government benefits for a significant number of citizens if a resolution is not promptly achieved. This uncertain political landscape is influencing market sentiment, with stock futures indicating a bearish opening as investors grapple with the potential implications of the shutdown.
As Wall Street analysts suggest a pivot towards safer assets in light of the increasing volatility, Bitcoin appears to be gaining favor among investors. The cryptocurrency’s rise is buoyed by growing acceptance from Wall Street institutions, with many now viewing it as a legitimate asset class rather than merely a quick trading option. Over the course of the year, Bitcoin has surged approximately 25%, reflecting its evolving status in global financial markets. Similar to Bitcoin’s trajectory, gold has also seen significant gains, further underscoring the shift towards alternative investments during times of economic and political strife.
