Bitcoin and Ethereum Stabilized as U.S. Shutdown Continues
Background on Bitcoin and Ethereum Performance
Bitcoin and Ethereum stabilized this week after a period of heightened volatility, as investors continued to watch the ongoing U.S. government shutdown. As of the latest data, Bitcoin (BTC) traded at $112,127, recording a 1% increase in the past 24 hours. Meanwhile, Ethereum (ETH) was priced at $4,094, reflecting a 3.6% daily gain, according to CoinGecko. Bitcoin is currently less than 12% below its all-time high above $126,000, while Ethereum remains approximately 18% under its peak valuation.
The stabilization in the largest cryptocurrencies follows considerable swings earlier in the month as traders reacted to macroeconomic uncertainty. The U.S. government shutdown—now in its third week—has contributed to cautious sentiment across digital asset markets.
Macroeconomic Impact and Gold Prices
While Bitcoin and Ethereum prices have leveled out, gold surged to record levels above $4,200 per ounce. This trend reflects market participants turning to safe-haven assets amid concerns over global liquidity and the direction of U.S. monetary policy. Hui Wen Thoo, Business Manager at QCP Capital, noted that “central bank buying, de-dollarization flows, and institutional portfolio hedging have become the dominant forces propelling gold higher” (Decrypt).
Analysts have also discussed the position of Bitcoin in the so-called “debasement” trade, where investors use assets like precious metals, stocks, and cryptocurrencies to hedge against the erosion of fiat currency value. Although the current market environment has slowed the narrative that positions Bitcoin on equal footing with gold as an inflation hedge, it has not undone it, according to recent analyst commentary.
Effects of the U.S. Government Shutdown
The U.S. shutdown, which began on October 1, has delayed the release of significant economic data, including the September Consumer Price Index (CPI) from the Bureau of Labor Statistics (BLS). The release, originally scheduled for this week, was postponed and will now be published on Friday, October 24, ahead of the next Federal Open Markets Committee (FOMC) meeting. This exception aims to prevent delays in Social Security benefit processing, but no other economic releases will be rescheduled during the shutdown according to the BLS.
Market analytics platform Myriad, operated by Decrypt parent Dastan, revealed that most users predicted an extended shutdown, with expectations shifting as early as October 3. Current economic uncertainty echoes similar past events, such as the 1995–1996 government shutdowns, which also overlapped with key FOMC meetings. At that time, according to then-Federal Reserve Chairman Alan Greenspan, the shutdown posed “a downside risk to the expansion whose effects would depend on the presently uncertain duration of the shutdown, and the potential unsettlement in financial markets” (Decrypt).
Federal Reserve Outlook and Market Projections
Despite these challenges, current Fed Chair Jerome Powell expressed cautious optimism about the committee’s ability to continue with planned rate adjustments. He stated that “even without new Bureau of Labor Statistics data—delayed because of the federal government shutdown—privately produced measures of the jobs market provide enough grounds to show the jobs market was cooling” (Reporting via Decrypt).
Projections from prediction markets and tools such as the CME FedWatch Tool indicate a 97% probability that the Federal Reserve will cut rates by 25 basis points this month and a 94% chance of an additional 25-basis point reduction in December. Uncertainty remains around how many total cuts might occur in 2025, with shifts in sentiment reflecting ongoing economic and market unpredictability.
For more on trends in digital assets, visit the Vizi cryptocurrency section.
What’s Next for Crypto and Macro Markets?
Market participants will closely monitor the delayed CPI release and upcoming FOMC meeting as they seek clearer signals on the future path of U.S. monetary policy. The stabilization of Bitcoin and Ethereum prices amid the current government shutdown highlights the resilience of major cryptocurrencies, even as gold asserts itself as a preferred hedge for some investors. Ongoing macroeconomic developments, including the potential for further rate cuts and resolution of the shutdown, will likely shape trading dynamics in the coming weeks.
