How U.S. government shutdown affects crypto industry?
For those of you unaware, if U.S. government can’t reach an agreement on any important government topics – such as budget on a border wall – it simply ‘goes dark’ until the compromise is reached. Year after year, the country has been experiencing shutdowns until the Congress reached a compromise. Sometimes these shutdowns can last for days, sometimes for weeks. The longest government shutdown to date lasted for 21 days, between Dec. 5, 1995 and Jan. 6, 1996.
Despite the fact that cryptocurrency and politics are not typically connected, this case is an exception. According to Mati Greenspan, Senior Market Analyst at eToro, there are at least three major changes this current U.S. government shutdown brings to the crypto industry.
- More selling pressure on Bitcoin
- Potential delay in the launch of Bakkt
- Further positive improvements in Bitcoin fundamental indicators
U.S. government shutdown always creates uncertainty, and the pricing of cryptocurrencies are not standing aside, being mostly in the reds during the shutdown. However, despite the increasing selling pressure, Bitcoin fundamentals are, on the contrary, stronger than ever, Greenspan notes. Among fundamentals the analyst cites blockchain stats, transaction rate and volume, as well as rapidly increasing ATM and merchant adoption, since many see crypto as an alternative to instabilities connected with government-issued money.
Lastly, the launch of Bakkt could be affected as well, since it’s still pending approval. It’s not yet clear whether or not financial regulators have been affected by the shutdown, however, considering the fact that all government offices work with limited to no capacity, their preferences are most likely not on approving any new applications.
The shutdown is set to drag into 2019, with no definite day or even a hint as to when the government work resumes.