BTC and Gold Experience Uptick as US Government Shutdown Delays Data Release, Fueling Speculation of Rate Cuts

As reported by Francisco Rodrigues, with all times given in Eastern Time unless otherwise stated, Bitcoin, currently at $86,817.46, is poised on the cusp of a significant phase due to the convergence of macroeconomic and cryptocurrency-specific factors. The ongoing US government shutdown has resulted in the delay of key data releases, such as employment reports, prompting traders to turn their attention to alternative assets like Bitcoin and gold. This shift has led to Bitcoin reaching $120,000 after a 9% increase this week, while gold has risen by 2.9% to $3,900. The shutdown has significantly impacted regulatory bodies, with over 90% of SEC staff furloughed and the CFTC operating with a reduced workforce. In response to these developments, markets have rallied, driven by the anticipation that the Federal Reserve will lower interest rates by 25 basis points later this month. This expectation stems from the unexpected decline in US private payrolls and the delay in other crucial economic data. Jake Ostrovski, Head of OTC Trading at Wintermute, noted that despite the lack of immediate catalysts, the broader trend remains positive as we enter a rate-cutting cycle. Lower interest rates tend to make risk assets, including cryptocurrencies, more appealing, especially during a month when sentiment is typically high due to historical performance. Historically, October has been a bullish month for Bitcoin, and initial signs suggest that this year may follow suit. Gadi Chait of Xapo Bank emphasized that Bitcoin continues to demonstrate its resilience and ability to defy expectations as a digital asset. On-chain data supports this optimism, with apparent Bitcoin demand increasing by approximately 62,000 BTC per month since July, driven largely by ETFs and significant investors. Moreover, the crypto-native market has continued to expand, with DeFi's share of trading activity climbing significantly over the past month. According to dYdX Labs President Eddie Zhang, this shift is partly driven by renewed energy and participation from Asia, indicating that DeFi is beginning to fulfill its promise, with market adoption accelerating. Looking ahead, the crypto market is awaiting potential catalysts, including decisions on ETFs for several altcoins that could be delayed due to the shutdown, and Ethereum's Fusaka upgrade, which is progressing slowly. Key events to watch include a comprehensive list of happenings this week, available on CoinDesk's Crypto Week Ahead, and various token events, conferences, and analyses.