US Government Shutdown Nears End: Bitcoin Price Recovers After House Approval

The House ended the three-day government shutdown on Tuesday by approving a sweeping funding bill that sets a new fiscal deadline for the Department of Homeland Security in two weeks. The bill is now headed to the White House, where President Trump is expected to sign it quickly.

The bill was passed narrowly, with a 217–214 margin. The GOP leaders encouraged their members to support the bill, despite their internal frustration, to avoid a repeat of the 43-day shutdown that disrupted Washington last fall. The bill was passed after days of pressure, as the House failed to meet its deadline of January 31.

Government Shutdown Triggers Bitcoin Rebound

The House’s failure to vote on the Senate-approved bill caused the government shutdown. This triggered a delay in the operation of some federal services until an agreement was reached. 

Bitcoin responded immediately to the final vote by the House of Representatives. The price of Bitcoin went from an intraday low of around $73,000 to trading just below $76,000 shortly after the passing of the bill. 

Bitcoin went briefly above the $76,000 mark after the passing of the vote, driven by the surge in trading volumes in the futures market and the spot market.

The end of the government shutdown is also considered to have had a short-term positive effect on Bitcoin, as the cryptocurrency has recently touched new yearly lows. The selling pressure of BTC ETFs and miner transactions has also contributed to the decline in the cryptocurrency. 

Also Read: Fed Chair Nomination: Trump Picks Crypto-Friendly Kevin Warsh to Lead Federal Reserve

The market experienced uncertainty due to the discussion surrounding the nomination of inflation-focused economist Kevin Warsh as the next Federal Reserve chair.

Jobs Report Resumes as Senate Advances Legislation

In addition, reopening the government also paves the way for the delayed January jobs report from the U.S. Bureau of Labor Statistics. This jobs report includes unemployment data that can impact U.S. macroeconomic expectations. The shutdown delayed the release of this report.

Major legislation on digital assets is still being debated in the Senate. Last week, the Senate Agriculture Committee voted on a market structure bill along party lines. 

The proposed amendments from the Democrats were not included. The legislation is also expected to affect the cryptocurrency and banking industries.

The Senate Banking Committee oversees the part of the bill tied to the U.S. Securities and Exchange Commission.

The delay comes after comments made by Coinbase CEO Brian Armstrong, who said he cannot support the bill in its current form. As of Tuesday, the new markup date has yet to be announced.

Also Read: Fed Signal: Trump’s Nomination Sends Mixed Message for Bitcoin and U.S. Liquidity