The crypto market is showing recovery amid the second day of the partial US government shutdown.
On Thursday, the price of Bitcoin rose to $121,000—for the first time since mid-August. Ether is holding above $4,500, its best level in the past three weeks. Recall that Bitcoin’s all-time high was recorded on August 14—around $124,000.
The US shutdown, which began on October 1, at first glance seems like negative news, but so far the markets are behaving differently. The government apparatus is partially halted, Congress hasn’t agreed on the budget, but the stock market, like crypto, is in no hurry to fall.
Investors have seen this before. Every time since 1990, the S&P 500 index has gone up during government shutdowns. Now, as Bitcoin increasingly moves in sync with stock indices, it could get the same boost.
Bitcoin remains at $121,000, while gold has meanwhile set a new all-time high—$3,900 per ounce. At JPMorgan they believe that crypto is lagging far behind gold, and this could change the balance. According to their calculations, adjusted for volatility, Bitcoin should be worth much more—up to $165,000 by the end of the year.
Retail is actively supporting this trend. People continue to invest in gold and crypto, seeking refuge from fiat devaluation, budget deficits, and general instability.
“Today, Bitcoin is increasingly seen as a true reserve asset—liquid, decentralized, and outside the control of governments,” says John Haar of Swan Bitcoin.
According to him, there is a noticeable shift in the market: there are fewer speculators and more strategic investors. And it is they who can push the price above previous highs.
October surge
Long-term optimism fits well with the short-term “Uptober” narrative—this is what traders call October, traditionally the strongest month for Bitcoin. Since 2013, the average growth during this period exceeds 14%.
“The first signals show that this year the trend may continue. Even the US shutdown hasn’t slowed the momentum, which shows how resilient Bitcoin has become lately,” said Gadi Chait, head of the investment division at Xapo Bank.
Crypto company stocks are also showing confident growth. Coinbase shares added more than 7%, and the recently listed Bullish and Circle jumped by 11% and 16% respectively.
Additional support for the market came from inflows of nearly $2.4 billion into Bitcoin and Ether ETFs this week.
Inflows into Bitcoin ETFs over the past 12 months. Source: The Block Data
A positive macroeconomic background is also helping.
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According to CME FedWatch data, markets are pricing in a 98% probability of another quarter-point rate cut at the October Fed meeting. The central bank already cut rates in September—for the first time in four years, which triggered the initial rally in stocks and crypto. A second cut could only strengthen this soft pivot in the regulator’s policy.
