Bitcoin News Today: Bitcoin's Safe-Haven Surge: Government Shutdown Exposes Centralized Weakness

Bitcoin climbed to $116,281 on October 1, 2025, as the U.S. government entered a partial shutdown following a congressional impasse over a funding bill. The cryptocurrency rose 2.8% in the 24 hours after midnight, when the Senate failed to pass a stopgap funding measure, triggering furloughs for non-essential federal workers and halting operations at agencies like the IRS and national parks title1^[1]. This marked Bitcoin's emergence as a safe-haven asset amid political uncertainty, echoing gold's performance as traditional markets faltered. The S&P 500 and Nasdaq futures fell by 0.58% and 0.67%, respectively, while Bitcoin and Ethereum outperformed, gaining 2.8% and 2.8% title5^[5].

The shutdown, the first in six years, intensified investor flight to decentralized assets. Historical precedents showed mixed outcomes: during the 2013 shutdown, Bitcoin surged 10-14%, while the 2018-2019 shutdown saw a 10% decline amid a broader bear market title5^[5]. Analysts attributed the current rally to Bitcoin's growing perception as a hedge against geopolitical instability. "Bitcoin's appeal as a decentralized store of value is strengthening during periods of centralized dysfunction," noted a Web3 researcher title2^[2]. Institutional demand also rose, with $300–400 million in leveraged short positions liquidated as bulls regained control title3^[3].

Regulatory delays posed a secondary risk. The SEC and CFTC, operating with skeleton crews, postponed decisions on crypto ETFs, including potential approvals for Ethereum and Solana. This freeze could delay the CLARITY Act and other legislative progress until operations resume title2^[2]. Market participants warned of prolonged uncertainty, with Polymarket pricing a 38% chance of resolution by October 15 . While spot Bitcoin and Ethereum ETFs continued trading, pending applications for new products faced indefinite delays .

Technical analysis highlighted Bitcoin's resilience. The RSI dropped from 60.7 to 34.6 in late September, signaling oversold conditions before rebounding. A breakout above $118,000 could target $120,000, while a retest of $107,000–$108,000 would signal renewed weakness title3^[3]. Ethereum, meanwhile, faced downward pressure due to declining on-chain activity and ETF outflows. Its circulating supply increased as burn rates fell, exacerbating bearish sentiment title11^[6]. Altcoins, particularly Solana and XRP, showed mixed performance, with Solana recovering 5.7% on institutional buying but remaining vulnerable to liquidity crunches title3^[3].

The shutdown's macroeconomic ripple effects compounded volatility. Key economic data releases, including the October 3 jobs report and mid-October inflation figures, were delayed, leaving markets blind to Federal Reserve signals. A U.S. dollar dip against safe-haven currencies like the yen and Swiss franc further underscored risk-off sentiment . Analysts warned that prolonged paralysis could amplify Bitcoin's short-term swings, though its long-term fundamentals remained intact. "Bitcoin's decentralized nature insulates it from single-point failures, but regulatory delays and macroeconomic uncertainty will test investor patience," said a Tetra Digital executive .

Market participants remained divided on the shutdown's lasting impact. While some dismissed the shutdown as a temporary disruption, others cautioned that extended paralysis could erode confidence in traditional financial systems, accelerating crypto adoption. "Bitcoin's narrative as a non-sovereign store of value gains strength during these events," said a VeChain strategist . However, short-term volatility persisted, with $625 million in crypto positions liquidated in 24 hours, including $401 million in short positions title4^[4]. Traders were advised to maintain stablecoin liquidity and avoid large bets on altcoins until clarity emerged title2^[2].