Bitcoin Rallies Over $119K as U.S. Shutdown Unfolds; Options Market Offers Fresh Opportunities

Analysts Say U.S. Shutdown Could Push Back Economic Releases but Support Market Liquidity

Bitcoin surged to its highest level in more than two months after the U.S. government shut down operations on Wednesday, following Congress’s failure to reach a funding deal.

Analysts suggest the shutdown could delay the release of key economic data, including Friday’s nonfarm payrolls report. Such delays may set the stage for a potential liquidity boost in the financial system—easing access to funding, lowering borrowing costs, and fueling both economic growth and risk-taking across markets.

Stablecoin Uncertainty Increases as Banks Disband and Regulators Face Pressure

Fed Rate Cuts and Data Delays Could Fuel Bitcoin Rally, According to Analysts

Matt Mena, crypto research strategist at 21Shares, said the U.S. government shutdown may delay the Bureau of Labor Statistics’ jobs report, strengthening the case for additional Federal Reserve rate cuts. He expects a 25 basis-point cut in October, with a second reduction possible by December, alongside early signs of tapering quantitative tightening (QT).

“This combination should drive real yields lower, soften the dollar, and support gold,” Mena explained, noting that such conditions typically create a positive liquidity impulse that benefits Bitcoin.

The ADP payrolls report, released on Wednesday, pointed to weakness in the labor market, reinforcing expectations for further monetary easing. Mena added that Bitcoin’s price jump after the shutdown could be the first signal of an explosive rally ahead, as the cryptocurrency continues to thrive in periods of uncertainty and disrupted data.

Australians Can Now Use Bitcoin to Secure Home Loans, Ushering in a New Age in Finance

Magadini: Shutdown May Ignite Bitcoin Volatility; Options Market Signals Opportunity

Greg Magadini, Director of Derivatives at Amberdata, said traders expecting a major move in Bitcoin while staying hedged may find opportunities in Deribit-listed options, which currently appear inexpensive at the front end.

After a long “dry spell” in BTC volatility, Magadini told CoinDesk that the U.S. government shutdown could catalyze a significant move. He pointed to the steep contango in the implied volatility (IV) term structure—an upward-sloping curve that shows the market expects higher volatility in the future. This makes near-term options relatively cheap, since option pricing is heavily influenced by implied volatility.

Magadini highlighted the long straddle as a preferred strategy to play the potential volatility boom. The strategy involves buying both a call and a put option at the same strike price and expiry. While the call profits from price gains and the put provides downside protection, together they allow the buyer to benefit from sharp moves in either direction.

“The USD is likely to see flows on the back of the shutdown and this week’s payroll data, which will guide the Fed,” Magadini said. “These catalysts could either push BTC higher as a dollar hedge or drive it lower if risk assets panic—which explains the bias for straddles.”