Bitcoin hits $105,000 as crypto rallies on prospect of end to government shutdown
Bitcoin (BTC-USD) and altcoins Ripple (XRP-USD) and Solana (SOL-USD) saw a surge in value as investors embraced risk-taking amid optimism about ongoing fiscal spending and progress toward ending the government shutdown. President Trump’s proposal of a “dividend of at least $2,000” per person from tariff revenue further fueled growth sentiment, propelling tech stocks and leading the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) higher.
Bitcoin experienced a more than 1% increase, surpassing $105,000 after recently hitting a six-month low just below $100,000. Analysts suggest that once Washington reopens, government spending will likely support crypto prices by injecting more liquidity into the market. Additionally, Ripple and Solana saw gains of 10% and 3%, respectively.
The reopening of the government would enable the release of economic data, aiding Federal Reserve officials in determining their next policy move in December. If the data indicates a decline in the labor market, the Fed may opt for another rate cut following the October easing. Furthermore, Federal Reserve Bank of New York President John Williams hinted at the potential need for the central bank to expand its balance sheet through bond purchases, which would effectively inject more money into the financial system.
According to a note from 10X Research, a Fed balance-sheet expansion and a potential December rate cut would be highly favorable for Bitcoin and could reignite the broader bull market. However, the note also cautioned that the temporary support from the government-reopening bounce may not be sufficient, with ETF outflows likely to resume unless the Fed takes decisive action to cut rates or significantly increase liquidity.
Bitcoin faced a decline last month due to forced selling from leveraged trades and long-term holders securing profits, following its all-time high exceeding $126,000 in early October. JPMorgan managing director Nikolaos Panigirtzoglou indicated that the deleveraging episode is mostly in the past and forecasted substantial upside for Bitcoin over the next 6-12 months, potentially driving the price to as high as $170,000.
Ines Ferre, a senior business reporter for Yahoo Finance, tracked the movement of Bitcoin and altcoins amid the government shutdown and fiscal spending discussions. For the latest cryptocurrency news, prices, updates, and more, readers can visit Yahoo Finance. Stay informed on the latest financial and business news by following Yahoo Finance.
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