The Bitcoin price fell to weekly lows of $101,300, marking a 3.4% decline in one day. This drop occurs as US stock markets and gold experience a rally. Investors are anticipating a key vote in the House of Representatives to end the US government shutdown, leading to a noticeable shift in sentiment toward traditional assets.
US stock markets rose on Wednesday. The Dow Jones Industrial Average gained 0.9%, boosted by Goldman Sachs and JPMorgan Chase. The S&P 500 edged up 0.1%, while the Nasdaq Composite slipped 0.3%. On the other hand, gold climbed to $4,180 and silver rose above $53, boosted by safe-haven demand.
Will the end of the government shutdown rekindle interest in Bitcoin?
The sharp decline in Bitcoin price is part of a broader shift in risk assets. As the government shutdown vote approaches, investors appear to favor assets with clearer exposure to economic policies. The rally in precious metals reflects safe-haven demand. It also anticipates a potential Federal Reserve policy pivot.
Additionally, Bitcoin’s decline may reflect profit-taking after a minor rally. It also suggests lower institutional flows into cryptocurrencies compared to more traditional vehicles. The market appears to be tilting toward the conventional end of the risk spectrum. This leaves Bitcoin aside from the primary rotation in governance- and policy-sensitive assets.
Despite current woes, volatility may soon swing in favor of BTC. Spot Bitcoin exchange-traded funds (ETFs) are showing signs of recovery. These recorded $524 million in cumulative net inflows on Tuesday, the largest single-day total since October 7. If volatility in equities stabilizes after the shutdown, Bitcoin could regain momentum. This would happen as institutions return to seek diversification away from traditional markets.
