U.S. government shutdown could boost bitcoin price, crypto bulls say. Where is the coin heading to? 

Also read: U.S. government shutdown: Here’s how a partial closure could affect you

I talked to a few industry participants to gather their views on how it could impact crypto.

Find me on Twitter at @FrancesYue_ to share any thoughts on crypto or this newsletter.

A bitcoin boost?

David Tawil, president and co-founder at ProChain Capital, said a government shutdown could be positive for bitcoin, as it means that “not only individuals and institutions will get negative on sovereign governments that are dysfunctional, but their competence and fiat currency goes down further,” Tawil said. 

Such a narrative could serve well for bitcoin, which has long been touted by its supporters as a non-sovereign reserve of value, and a potential hedge against the existing monetary system, noted Tawil. In March, Bitcoin rose over 23% on the back of the banking crisis in the U.S.

The extent of boost bitcoin could get depends on the length and severity of the government shutdown, noted Tawil. “If the shutdown happens and lasts, for example, a couple of weeks, I can see us moving from where we are right now to at least $35,000,” Tawil said. 

Bitcoin rallied almost 60% so far this year, but is still down over 60% from its all-time high in 2021, according to CoinDesk data. 

Tal Cohen, managing director at Kraken USA, agreed that a government shutdown could be beneficial for bitcoin, but is less bullish on the price increase.

“I don’t see Bitcoin going to $35,000 because there is a beginning of a government shutdown here,” Cohen said. “For Bitcoin to go to extreme heights, it would require a dramatic change in supply and demand, and that’s not going to happen with the government shutdown,” Cohen said. 

‘Stand with Crypto Day’

Crypto entrepreneurs across the U.S. gathered in Washington D.C. this week, joining Coinbase chief executive Brian Armstrong to lobby lawmakers for legislation they say could bring much-needed regulatory certainty to the industry, MarketWatch’s Chris Matthews reported.

The group hopes to convince lawmakers to take up bipartisan legislation passed this summer by the Republican-led House Financial Services Committee and House Committee on Agriculture that would create a new regulatory framework for digital assets that would open up less burdensome paths for crypto companies to come into compliance.

Coinbase organized the event called Stand with Crypto Day, which took place on Wednesday, in order to raise awareness around crypto. 

The event coincided with an oversight hearing at the House Financial Services Committee, where the Securities and Exchange Commission Chair Gary Gensler reiterated that all crypto companies should strictly abide by U.S. securities laws, while some republicans argued that the SEC’s disclosure rules were designed to regulate traditional markets, and are not suitable for crypto. 

Read more here. 

Ether futures ETF 

VanEck said Thursday that it is ready to launch an exchange traded fund that invests in ether futures, while it didn’t specificy the date.

The ETF, which is called VanEck Ethereum Strategy ETF, will be listed on CBOE and will be actively managed by Greg Krenzer, head of active trading for VanEck, according to a statement.

“Looking like the SEC is gonna let a bunch #Ethereum futures ETFs go next week potentially,” James Seyffart, ETF analyst at Bloomberg Intelligence wrote in a Wednesday post on X, formerly known as Twitter. The agency has yet to greenlight any ether futures ETF, while it has approved several ETFs that invest in bitcoin futures.

Crypto in a snap

Bitcoin
BTCUSD,
-0.23%
lost 1.2% in the past seven days and was trading at around $27,111 on Thursday, according to CoinDesk data. Ether
ETHUSD,
-0.33%
gained 1.2% during the same period to around $1,657.

Must-reads

• The World’s Biggest Crypto Firm Is Melting Down (The Wall Street Journal)

• JPMorgan’s UK bank Chase to ban crypto transactions (Reuters)