Crypto markets tend to react to global happenings. Their reaction can be unfavorable at times, whereas at other times it may be favorable. One thing is for sure that no matter what the big world event is, crypto cannot remain indifferent, whether it is economic news, a nation's conflict or some other case, crypto is always picking up something from it
Back in 2020, when COVID-19 ground the world to a halt and shutdown that followed, the crypto market responded in an unexpected manner amidst traditional systems struggle. That incident signalled the beginning of the bull run that lasted for almost 2 years. As people begin to look for alternative means of income and investment opportunities, crypto becomes very much appealing because it has no limitations. These shifts created the perfect condition for crypto to rise.
Presently, the world is facing a similar situation with the US government shutdown. When faced with such circumstances, conventional monetary systems are not sure what will happen, workers employed by the Federal government are let go without any guarantees that they will receive their salaries, there is a breakdown in government services and the markets become unstable. Such instability in traditional markets, however, opens doors for individuals to look beyond conventional investment avenues.
Just like COVID-19 shutdown creates opportunities for people to explore alternative investment assets, similar dynamics could play out during this current government shutdown in the US. When traditional government functions pause, it brings to fore the appeal of a decentralized system. The decentralized nature, coupled with the fact that crypto never sleeps could attract increased attention.
Government shutdown can lead to market volatility. Such kind of instability in the markets has traditionally propelled the fortunes of the crypto sector seeing that people who have money at this period to invest lookout for non-traditional investment vehicles. By design, crypto is immune to any intervention of the government, so they carry on doing what they do even if a government shutdown occurs.
You can also think about the psychological impact a shutdown would have on the citizens. Government shutdowns remind people of the fragility of traditional systems. This awareness could lead to people shifting their interest to crypto.
The global nature of crypto makes it appealing during a time like the current US government shutdown. People can find help in crypto for their international money transfer coming from the US. The global accessibility of crypto could drive increased adoption during national disruption. So, disruptions to traditional systems can catalyze crypto market growth.
It is not a new thing for people to turn their attention to alternative financial systems during times of unstable traditional markets, as history keeps on repeating itself. Just like during the coronavirus pandemic, the current government shutdown may become a significant crypto adoption moment.
Moreover, the effect of the shutdown on government agencies in charge of regulations may lead to less supervision in traditional markets for a while, thus making the decentralized character of crypto more appealing. Such a circumstance may allow crypto markets to show their strength and usefulness.
Posted Using INLEO