The first U.S. government shutdown in nearly seven years triggered a flight to safe‑haven assets Wednesday, with Bitcoin climbing 3.6% in 24 hours to reach $117,293.
Gold simultaneously touched a new all‑time high above $3,922 per ounce before settling near $3,902, marking a 4.6% weekly gain.
Traditional markets painted a contrasting picture as Wall Street opened lower following the midnight shutdown. The S&P 500 dropped 0.5% to $6,658 at market open, while the Nasdaq composite fell by a similar margin to $22,530. Both indices later recovered some ground throughout the trading session.
The shutdown’s duration remains unknown, though historical precedent suggests extended uncertainty. The last closure during late 2018 lasted 35 days, becoming the longest in U.S. history. The S&P 500 shed over 9% during that period in December 2018, marking the worst December performance since 1931.
Federal agency operations have largely halted, including the collection of critical economic data. This pause in macroeconomic reporting adds another layer of uncertainty to market conditions.
Bloomberg senior analyst Eric Balchunas suggested Bitcoin may finally be decoupling from traditional markets. The cryptocurrency’s independent movement could attract institutional investors seeking portfolio diversification beyond correlated assets, he noted.
Recent market behavior supports this decoupling thesis. While stocks rallied last month, Bitcoin declined, demonstrating inverse correlation. The Federal Reserve’s anticipated rate cut, which Balchunas described as nearly guaranteed given recent policy shifts, may further support cryptocurrency prices.
Balchunas emphasized that zero correlation with traditional markets could significantly boost Bitcoin’s valuation potential. Gold maintains zero correlation with equities, serving as the benchmark for true diversification assets.