Bitcoin News Today: Bitcoin Caught in Shutdown and AI Exodus Crossfire

Bitcoin's Down Again: Is It the Government Shutdown or AI?

Bitcoin's on-chain metrics are flashing caution signals as the U.S. government shutdown enters its second month, sparking debate over whether the crypto asset's recent decline stems from broader economic uncertainty or AI-driven market dynamics. Analysts point to a confluence of factors: frozen federal spending, disrupted economic data flows, and shifting capital allocations in the artificial intelligence sector. The $14 billion GDP drag from the shutdown, combined with SoftBank Group Corp.'s $5.8 billion exit from Nvidia Corp. shares, has amplified volatility in both traditional and crypto markets, according to a Yahoo Finance report.

Nvidia, the chipmaker central to AI infrastructure, continues to face supply constraints despite robust demand for its Blackwell platform. CEO Jensen Huang recently emphasized that wafer shortages with TSMC and HBM memory bottlenecks remain critical hurdles, even as the company secures land for a Taiwan headquarters to anchor its supply chain, as TechCrunch reported. The stock, however, has cooled from its historic highs, mirroring broader tech sector weakness. SoftBank's decision to liquidate its Nvidia stake—part of a broader AI investment strategy favoring OpenAI—has added downward pressure, with shares sliding 3.5% post-announcement, as The Guardian reported.

Meanwhile, Bitcoin's price action reflects a tug-of-war between macroeconomic fears and AI-driven optimism. Exchange reserves, a key on-chain indicator, have risen for six weeks, signaling risk-off behavior as traders move BTC back onto platforms ahead of potential profit-taking, as the Yahoo Finance report noted. Stablecoin outflows have also surged to record levels, suggesting investors are parking funds in private wallets amid uncertainty. Yet, analysts caution that Bitcoin's path to $112,000 remains contingent on resolving the government shutdown and clarity around AI capital expenditures, as Cointelegraph reported.

The shutdown's impact on economic data has further muddied the picture. Federal Reserve officials, including Governor Lisa Cook, have warned that delayed labor market and GDP reports are complicating policy decisions, as Yahoo Finance reported. This uncertainty has dampened risk appetite, with Bitcoin mirroring broader market anxiety over a potential recession.

Investor strategies are also pivoting. Billionaire Stanley Druckenmiller, who previously bet heavily on AI stocks like Nvidia and Palantir, has shifted to healthcare, boosting stakes in Eli Lilly and Viking Therapeutics, as Daily Hodl reported. Similarly, SoftBank's AI bets—spanning OpenAI, Stargate data centers, and robotics—highlight a broader reallocation of capital toward long-term bets, even as near-term volatility persists.

Looking ahead, Nvidia's Q3 earnings in November could provide a catalyst. Wall Street expects $54 billion in revenue, with adjusted EPS of $1.25, but analysts at Finbold estimate only a 30% chance of hitting $250 per share, contingent on a near-perfect earnings beat, as Finbold reported. For Bitcoin, the resolution of the government shutdown and the release of key economic data will be critical. A short squeeze scenario is possible if the shutdown ends, but sustained momentum will require stronger conviction in AI's long-term growth trajectory.