Could the U.S. government shutdown actually be a secret catalyst for a Bitcoin bull run? It sounds crazy, right? But history might be rhyming... Let's dive into the intriguing connection between past shutdowns and Bitcoin's market movements, and explore what it could mean for your crypto portfolio.
Updated Oct 15, 2025, 11:36 a.m. Published Oct 15, 2025, 11:27 a.m.
The current U.S. government shutdown has thrown a wrench into the gears of the market, leaving traders without the usual stream of economic data. This lack of information creates uncertainty, making it tough to predict which way the market will swing. So, what's an investor to do? One strategy is to look back at how markets behaved during previous shutdowns.
Interestingly, the last time the U.S. government locked its doors – a 35-day stretch from late December 2018 to late January 2019 – it happened at the same time as Bitcoin was hitting rock bottom in its bear market.
Here's the play-by-play: Back in mid-November 2018, Bitcoin was trading around $6,000. By December, it had plummeted to just over $3,000. This dramatic drop marked what many consider the final "capitulation" event, where even the most die-hard holders threw in the towel. But here's where it gets interesting...
The week of December 17th, 2018, saw Bitcoin reach its absolute lowest point. Then, something remarkable happened. Following the government's reopening, Bitcoin embarked on a powerful recovery, stringing together seven consecutive weeks of gains between February and April, ultimately pushing prices above $5,000. That's a significant rebound!
Now, let's be clear: the fact that Bitcoin bottomed out during the previous shutdown doesn't automatically mean the shutdown caused the turnaround. Correlation doesn't equal causation, as they say. Also, since the start of the current shutdown, Bitcoin has actually declined by over 1%, mirroring the downturn on Wall Street, where the tech-heavy Nasdaq index has also taken a hit. And this is the part most people miss... The broader economic climate plays a huge role.
That said, the big question on everyone's mind is: Could Bitcoin repeat its 2018 performance and launch into a new rally? Nobody knows for sure. But, a recent massive "leverage flush-out" combined with growing hopes for interest rate cuts by the Federal Reserve, could create a more stable foundation for a new upward trend. Let's break down these factors:
Leverage Reset: A Clean Slate for Bitcoin?
Just recently, the crypto market experienced its largest liquidation event ever, wiping out a staggering $20 billion in leveraged futures bets linked to Bitcoin, Ether, and other altcoins. This happened on a Friday, sending shockwaves through the market. (https://www.coindesk.com/markets/2025/10/12/friday-s-usd20b-crypto-market-meltdown-a-bitwise-portfolio-manager-s-postmortem-analysis)
Bitcoin's price briefly crashed to as low as $107,000 on Coinbase, with some exchanges reporting even lower prices. That was Bitcoin's lowest point since July. While painful for those caught in the liquidation, some analysts believe this "de-leveraging" event has actually improved the market's overall health.
CoinMetrics, for example, described it as a necessary "stress event" that cleared out excessive speculation. "In the end, the great de-leveraging was a stress event rather than a systemic failure. While disruptive, it helped flush out excess leverage and leaves the market on a healthier footing going forward," they stated in their weekly newsletter.
Gold's Golden Glow: A Leading Indicator for Bitcoin?
There's another factor potentially supporting a bullish outlook for Bitcoin: the ongoing surge in the price of gold. Gold is often seen as a safe-haven asset and a hedge against inflation.
The price of gold has broken above $4,200 per ounce for the first time ever, up a whopping 61% year-to-date and 10% since the government shutdown began. Other precious metals, like silver, palladium, and platinum, are also experiencing significant gains.
Historical data suggests that Bitcoin tends to follow gold's lead, with Bitcoin's price appreciation typically starting after gold's rally cools off. (https://www.coindesk.com/markets/2025/03/18/gold-leads-the-way-bitcoin-follows-history-suggests-a-familiar-pattern)
Analyst Joe Consorti points out that Bitcoin usually lags gold by approximately 100 days. (https://x.com/JoeConsorti/status/1975595035354931435) Furthermore, according to JPMorgan’s volatility-adjusted fair value model, which compares Bitcoin to gold, Bitcoin could potentially reach around $165,000 by the end of the year. (https://www.coindesk.com/markets/2025/10/02/bitcoin-could-reach-usd165k-based-on-gold-s-record-run-jpmorgan)
The Million-Dollar Question (Literally?)
So, what does all this mean for the future of Bitcoin? Will history repeat itself, with the government shutdown paving the way for a new bull run? Or is this just a coincidence, with other factors at play? This is where it gets controversial... Some argue that the correlation between government shutdowns and Bitcoin's price is purely coincidental, while others believe there's a deeper connection related to economic uncertainty and investor behavior. What do you think?
AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards (https://www.coindesk.com/ethics) . For more information, see CoinDesk's full AI Policy (https://www.coindesk.com/coindesk-news/2023/04/14/how-coindesk-will-use-generative-ai-tools) .
More For You
Crypto Trading Volumes Fall 17.5% in September Despite Record Open Interest
Oct 10, 2025
Combined spot and derivatives volumes fell 17.5% in September, continuing a four-year seasonal trend
What to know:
- Trading activity falls 17.5% in September slowdown: Combined spot and derivatives volumes dropped to $8.12 trillion, marking the first decline after three months of growth. September has now seen reduced trading volume for the fourth consecutive year.
- Open interest reaches record high despite derivatives market share decline: Total open interest surged 3.2% to $204 billion and peaked at an all-time high of $230 billion during the month.
- Altcoins on CME outperform as Bitcoin and Ether futures decline: While CME's total derivatives volume stayed flat at $287 billion (-0.08%), SOL futures jumped 57.1% to $13.5 billion and XRP futures rose 7.19% to $7.84 billion. BTC and ETH futures fell 4.05% and 17.9% respectively.
More For You
Crypto Miner Bitdeer Surges 30% as Company Pushes Deeper Into AI and Data Center Expansion
10 minutes ago
The firm said it sees a "sustained imbalance" between demand and supply of AI computing power, and projected to generate up to $2 billion annually from AI operations.
What to know:
- Bitdeer Technologies (BTDR) soared as much as 30% after announcing plans to expand into AI infrastructure.
- The company will manage its own AI data centers, starting with a facility in Ohio, which will have full electrical capacity by late next year.
- Bitdeer's expansion is part of a trend among crypto miners shifting towards AI to meet growing demand for computing capacity.
What are your thoughts? Do you think the government shutdown will impact Bitcoin's price? Share your predictions in the comments below! Let's discuss.
