The United States government shutdown has gone on for 17 days now and is still showing no signs of abating. We explore the effects of the shutdown on events in the United States and its possible influence on cryptocurrency sphere.
How It All Began
Many people and especially outsiders from the United States are looking for whom exactly to blame for the unexpected state of unrest in the states (no pun intended), and Trump is not reluctant to carry all the blame. While some Republicans might be actively seeking a way to have Democrats bear the brunt of the third shutdown in 2018, Trump has told them to look no further, “I’ll tell you what: I am proud to shut down the government for border security,” he said in December. “I will be the one to shut it down. I’m not going to blame you for it.”
It all started when the Donald Trump, president of the United States asked for a $5 billion funding for his long-publicized project, The Great US-Mexico border wall. In a widely televised meeting on December 11, the Senate would deny Trump’s demand, and Trump retorted right there that he would initiate a government shutdown, and would be very proud to take up the mantle of blame.
After a short tepid period of disagreement between the Senate and the president to reach a consensus or agree on a temporary continuing resolution, the third government shutdown started on December 22.
It has now been almost 20 days, going close to a month, and Donald Trump is yet to sign any bill, threatening to embark on the longest United States government shutdown in modern history. Trump has said he is not afraid of letting the shutdown stretch into months or years even. As the shutdown continues, however, the effects are only going to get exponentially worse.
Effects on Cryptosphere and the United States
The effects are only going to get worse. Some hits that could be expected include non-payment to the 800,000 federal workers in the United States. Also, more than 40 million American should get ready to lose SNAP benefits (Supplemental Nutrition Assistance Program) if the shutdown stretches beyond January. Millions of Americans who rely on rent assistance from the government might also be strongly affected if the issue is not resolved soon.
However, how about the shutdown’s influence on cryptocurrency? While the price of Bitcoin has continued to fluctuate over the shutdown period, there is no real proof that the two events are in any way correlated. There are bound to be indirect effects though.
For example, Bakkt which has been touted to have a significant effect on Bitcoin futures could have its timeline disrupted if no bills are going to be signed. Bakkt requiring key approvals from the US Commodity Futures Trading Commission (CFTC), a federal body that is in a way influenced by the Senate might have to shelve its plans in anticipation of an end to US government shutdown.
Since the US Department of Treasury, which responsible for issuing American dollars, might not function as correctly during the shutdown period, more attention might also be paid to digital currencies as recourse.
However, these are only a tad bit better than speculations, and the best development to hope for would be a quick reach of consensus that would see the end of the worsening shutdown.