Bitcoin falls to $101K as stocks, gold rally ahead of vote to end government shutdown

US stock markets soared on Wednesday as investors anticipated a US House of Representative vote on a bill to end the government shutdown. Bitcoin , on the other hand, fell from an intraday high of $105,300 to a weekly low near $101,200, marking a 3.4% decline.

Key Takeaways:

  Bitcoin four-hour chart. Source: Cointelegraph/TradingView

Market dynamics between Bitcoin and US indexes

The Dow Jones Industrial Average rose 0.9%, supported by strong performances from Goldman Sachs, JPMorgan Chase and American Express. The S&P 500 edged up 0.1%, while the Nasdaq Composite slipped 0.3%, reflecting modest weakness.

Meanwhile, gold climbed to around $4,180 and silver rose above $53, boosted by safe-haven demand and anticipation of resumed government data releases once the shutdown ends.

The sharp decline in Bitcoin is accompanied by a broader shift in risk assets. As the shutdown vote approaches, investors may be favoring assets with clearer exposure to economic policies and credit flows. The rally in precious metals reflected both safe-haven demand and expectations of a potential policy pivot by the Federal Reserve amid less-disrupted economic data flows.

Meanwhile, Bitcoin’s decline may reflect continued profit-taking following a minor rally on Wednesday, and potentially lower institutional flows into cryptocurrencies compared to more traditional vehicles.

The market appears to be tilting toward the conventional end of the risk spectrum as the shutdown risk recedes, leaving Bitcoin standing aside the primary rotation in governance- and policy-sensitive assets.

Volatility could shift in favor of Bitcoin

Despite the current price woes, volatility may soon swing in favor of BTC, with spot Bitcoin exchange-traded funds (ETFs) showing signs of recovery, signaling a gradual return of risk appetite following the record crypto market crash in early October. The spot Bitcoin ETFs recorded $524 million in cumulative net inflows on Tuesday, the largest single-day total since Oct. 7.

  Daily total netflows for spot BTC ETF. Source: SoSoValue

Additionally, with the Federal Reserve’s next policy guidance expected later this month, any dovish signals could boost risk appetite across crypto markets. If volatility in equities stabilizes after the end of the shutdown, Bitcoin could regain momentum as institutions return to seek diversification away from traditional markets.