How Are Bitcoin, Cryptocurrency Prices Reacting To Government Shutdown?

While politics continues over the ongoing government shutdown in the United States, one federal agency is continuing to keep a sharp eye on the trading of cryptocurrencies. Prices of bitcoin and other virtual currencies, which had been on a losing streak through most of last week, recouped some of their losses following the government shutdown Friday.

The Commodity Futures Trading Commission said in a statement Friday: “One component of the agency’s mission is to oversee orderly derivatives markets and to police those markets to ensure they are free of fraud and manipulation. In the event of a shutdown, the agency will have ‘excepted’ staff in place who will continue to perform this function across the derivatives markets — including the virtual currency derivatives market,” Bloomberg reported.

Bitcoin was trading below the $10,000 mark at the beginning of Thursday, having fallen from over $14,000 on the morning of Jan. 15. With the government shutdown looming, the price went up to a high of almost $12,000 on Thursday, and once the shutdown was confirmed, it touched a high of almost $12,900 Saturday night.

Where the price of bitcoin goes, other cryptocurrencies usually follow. So the price of bitcoin cash — a bitcoin fork — which was at a low of below $1,400 Wednesday night, had climbed up to almost $1,900 Thursday night and made the week’s high Saturday night, near the $2,100 mark. In the exact same time frame, ethereum rose from a Wednesday night low of about $790 to over $1,150 Saturday night. Litecoin, trading at below $150 Wednesday evening, crossed $210 Saturday night.

But the prices of digital currencies have all lost value during the last seven days, and are off their Saturday high points. One of the reasons behind the negative market sentiment is news from India where the banks have shut down numerous accounts associated with cryptocurrency trading and exchanges.

India still does not have any regulations over the trading of cryptocurrencies and they are not banned by law, but the government has taken a hard stance, and the new move by local banks was prompted by a statement by Indian Finance Minister Arun Jaitley to curb digital currency trading. The country’s tax department is also reportedly investigating top cryptocurrency exchanges in India.

As Sunday turned into Monday, bitcoin was trading close to $11,600. Bitcoin cash was around $1,760, ethereum just shy of $1,060 and litecoin was trading at over $190. The prices were taken from Coinbase, one of the biggest cryptocurrency exchanges worldwide.