The long-standing government shutdown, which caused significant disruptions, is finally coming to an end, bringing a sigh of relief to many, including the cryptocurrency market. Investors, nudged by the prospect of the shutdown’s conclusion, saw Bitcoin soar to $106,670 in the last 24 hours. However, one pivotal question remains: Is the cryptocurrency surge sustainable, and is the government shutdown truly over?
Is the Government Shutdown Truly Over?
Late Sunday, the U.S. Senate reached a much-anticipated agreement to end the shutdown, which marked a record duration of 41 days. Overcoming a crucial hurdle, the legislation required a 60-vote majority rather than a simple majority of 51. With support from eight Democrats, the Republicans achieved the votes required to pass the budget bill.
Following numerous failed voting attempts since early September, the bill, backed by eight Democrats, moved forward to the House of Representatives. Democratic Senator Tim Kaine’s acceptance was conditioned on recalling federal employees dismissed during the shutdown and a moratorium on layoffs until January 31.
Indeed, the government shutdown is ending but only until January 31. Essentially, this is a temporary budget solution. While the House of Representatives hasn’t convened since September 19, the Senate’s approval necessitates the House’s return within 48 hours.
Will the Cryptocurrency Surge Last?
Once the temporary budget reaches the House, the process should streamline, given the Republicans’ majority with 218 seats. The expectation is for the approval within the week, followed by President Trump’s signature, officially ending the shutdown. This period has obscured U.S. economic data for 42 days, leading to cautious market behaviors.
An exception was made last month when the inflation report was released, displaying normal results. With the upcoming economic reports, insights into the December interest rate decision predictions will emerge. Shortly, it will be assessed whether the surge in cryptocurrencies is a lasting trend.
Currently, the expectation for the December 10 interest rate decision leans towards a 64.9% chance of a 25-basis-point cut.
Are the risks completely gone? Certainly not. The Supreme Court is likely to rule against President Trump on tariffs, potentially destabilizing the U.S. economy and the cryptocurrency market. There are rumors that Trump has an aggressive plan of economic retaliation ready, contingent on this decision, suggesting potential market volatility.