Bitcoin Stumbles as US Government Shutdown Looms

The U.S. Federal government will shut down at midnight if Republicans and Democrats are unable to agree on a budget.

BTC Dips Under Shadow of U.S. Government Impasse

U.S. Republicans and Democrats locked horns over the fiscal direction of the country on Tuesday, with no resolution in sight, even as the deadline to pass a spending bill by midnight stands only hours away. Stock markets fell, and bitcoin dipped below $114K after a brief post-weekend rally on Monday.

Republicans currently enjoy a majority in both chambers of Congress, but even after passing a temporary funding bill in the House, Republicans failed to have that bill approved in the Senate, where it fell short by 60 votes. Democrats also proposed their own piece of legislation, demanding an extension of health insurance tax credits and a reversal of cuts to Medicaid implemented by the Trump administration earlier in the year. The Democrats’ bill also failed to pass in the Senate.

And now, both sides are blaming each other for the impasse, which if unresolved before midnight, will result in the fifteenth government shutdown since 1980. Another closure could mean millions of federal workers would go without pay, and many government programs and services would be impacted. The last shutdown happened during Donald Trump’s first term in 2018, lasted 35 days, and saw $3 billion in lost economic activity. Given such grim consequences, it’s no surprise that both bitcoin and stocks turned bearish on Tuesday.

“Senate Democrats have a binary choice to make,” said U.S. Senate Majority Leader John Thune on Tuesday afternoon. “They can vote for the clean continuing resolution to keep the government open, just as they did 13 times when Biden was in office, or they can shut down the government.”

Overview of Market Metrics

Bitcoin was priced at $113,922.15 at the time of writing, a small 0.13% decrease from yesterday, but a 1.83% gain since last week, according Coinmarketcap. The cryptocurrency has hovered between $112,740.56 and $114,836.62 over the past 24 hours.

( BTC price / Trading View) Trading volume for the day was down slightly by 4.1% at $57.86 billion, and market capitalization was largely unchanged, dipping 0.29% to $2.26 trillion in line with price action. Bitcoin dominance rose 0.51% to 59.14% over 24 hours.

( BTC dominance / Trading View) Total bitcoin futures open interest fell 3.19% to $80.25 billion for the day, according to data from Coinglass. Bitcoin liquidations came up to $47.65 million over 24 hours, with $29.43 million of that being shorts. Long liquidations made up the remaining $18.22 million.