Bitcoin rose to near record highs this week as the U.S. government shutdown fueled demand for alternative assets. The cryptocurrency traded around $120,500 on Friday, just 3% below its all-time high, after gaining 10% in the past week.
Analysts now believe a breakout is imminent. Standard Chartered strategist Geoffrey Kendrick projects Bitcoin will print a new record next week before surging toward $135,000. He argues that the gridlock in Washington is shaking confidence in U.S. institutions, just as the Fed comes under pressure to ease policy again.
Shutdown Creates Unique Crypto Backdrop
This marks the 22nd government shutdown since 1974, but the dynamic today is different. In 2018–19, a lengthy shutdown barely budged Bitcoin’s price. In 2025, however, the asset became more closely tied to government risk indicators, such as the Treasury term premium, which tracks investor demand for long-dated bonds.
With the Bureau of Labor Statistics and other agencies offline, key jobs and inflation data aren’t being released. This leaves the Fed and investors flying blind, forcing markets to lean on private-sector reports that already point to a sharp slowdown in hiring. That vacuum of official data is making Bitcoin more attractive as a hedge against institutional uncertainty.
Rate Cuts Back on the Table
The absence of government data comes at a critical moment for monetary policy. Private reports, including ADP’s employment gauge, suggest almost no net job creation in September. That has fueled bets that the Fed will cut interest rates again before year-end.
Futures markets now price in an 87% chance of two 25-basis-point cuts by December, which would lower the policy range to 3.50%–3.75% from the current 4%. A softer dollar and record highs in gold further underscore expectations for looser financial conditions. Historically, Bitcoin has thrived in this environment, as falling yields reduce the appeal of cash relative to risk assets like crypto.
Altcoin ETFs Face New Delays
While Bitcoin is benefiting, the shutdown complicates matters for the rest of the crypto sector. October was supposed to bring a wave of regulatory decisions on altcoin-based ETFs, including proposed funds tied to Solana, XRP, and Dogecoin. Those approvals are now likely to be delayed as the SEC stalls under limited government funding. Industry watchers warn that if the shutdown persists, the much-anticipated “Cryptober” for ETFs may not materialize, slowing momentum for non-Bitcoin tokens.
Looking Ahead
Bitcoin’s near-term trajectory depends on how long the shutdown drags on and how aggressively the Fed responds to economic softness. If policy easing accelerates and political dysfunction persists, Bitcoin could soon cross $135,000, cementing its role as a hedge against U.S. instability. However, a quick budget resolution or renewed inflation pressures could temper the rally. For now, crypto remains one of the clearest beneficiaries of Washington’s gridlock.