The anticipated end of the government shutdown in a few hours comes with significant economic shifts, notably in the gold and cryptocurrency markets. While the gold price has surged to $4,200, serving as a consistent warning signal for cryptocurrencies throughout the year, alternative digital currencies are experiencing downturns. The volatile reactions in the market are triggered by the same risk factors, signaling a not-so-optimistic outlook for digital currencies.
Gold’s Ascent and Cryptocurrency Decline
Companies such as Palantir, Oracle, Meta, and Tesla have reported mediocre performances, which aligns with Bitcoin’s recent downward trend observed in the last two hours. Despite a drop in Treasury yields, Bessent praised the rise in government bonds in today’s statement, claiming they deserve recognition for this financial elevation.
A vote in the House of Representatives is anticipated at 2 AM to conclude the government shutdown, and delayed reports, like the September employment report, will follow. Eradicating uncertainty is favorable for cryptocurrencies, yet foreboding surprises seem inevitable. The increasing prices of gold and silver reflect concerns over prominent risks, with silver futures trading above $53 today and exhibiting a weekly growth nearing 10%, a peak unseen since September’s high at $30.
Proximity to peak levels in stock markets and the AI bubble stories circulating for weeks have led investors to turn towards stable assets like gold and silver. This retreat from risks is driving unease in cryptocurrencies, causing significant drops in Bitcoin and altcoin prices.
Reasons Behind the Cryptocurrency Decline
Despite reasons favoring market rises, today, the justifications for declines are more compelling. The looming tariff cancellation by the Supreme Court stands as a major issue, fostering uncertainty and potential chaos if executed, with little belief in Trump’s success in this legal battle.
The expectation of evident monetary expansion next year, likely exacerbating inflation, supports the preference for safe havens. Although during Trump’s initial term, calls for AI and cryptocurrency growth heightened risks, resulting in surges within stocks and currencies, immediate and medium-term risks now loom with Trump having roughly three years remaining. The urgency for cryptocurrency legislation is pressing, as Republicans face potential losses in upcoming year-end elections threatening legislative advancements.
In summary, rising gold and silver values emerge from a flight from risk, impacting cryptocurrencies negatively. Inflation concerns, skepticism about the dollar’s future, geopolitical risks, and global economic worries constitute today’s economic landscape. A larger AI innovation wave might yet quell ongoing debates.
Additional short-term negativity emerges from Democratic Party members’ replies to Jeffrey Epstein’s emails about Donald Trump, complicating matters further.