The U.S. is on the verge of a partial government shutdown amid a divided Congress, mainly Republicans demanding deep cuts in public spending.
Ratings agency Moody’s warned that the government shutdown would have a negative impact on the creditworthiness of U.S. sovereign debt.
If that happens, hundreds of thousands of federal employees would be furloughed, and essential services like Social Security and Medicare could be affected. Economists at Goldman Sachs estimate that the government shutdown will reduce economic growth by 0.2 percentage points for every week it lasts. Additionally, without the latest data from the federal government, the Fed may face difficulty making decisions.
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The U.S. government shutdown could create uncertainty in financial markets, which could cause investors to seek refuge in safe or decentralized assets, such as Bitcoin.
Historically, demand for crypto increases during times of political or economic uncertainty. However, it is important to consider that Bitcoin and other cryptocurrencies are volatile and can be affected by a variety of factors.
Bitcoin rose 0.4% to $27,000 in the past 24 hours. It rose 1.5% last week and 3.6% last month. Bitcoin’s market capitalization is $526.591 billion, accounting for 48.9% of the total cryptocurrency market.
While it’s difficult to predict exactly how the Bitcoin market will respond to the U.S. government shutdown, political and economic uncertainty may prompt more investors to turn to Bitcoin as a safe haven. However, investors must be informed and consider all factors before making an investment decision.
Analyze the impact of a possible U.S. government shutdown on the price of Bitcoin and how political uncertainty affects financial markets.
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