Ethereum Crashes Below $3,300 As US Government Faces Longest Shutdown in History

The cryptocurrency market is facing another wave of turbulence this week as the US government shutdown continues. It now seems to be the longest in American history as it sends ripples of uncertainty along both traditional and digital financial markets.

As this turbulence continues, the cryptocurrency market has faced one of the sharpest corrections in several months. On Tuesday, the world’s largest cryptocurrency, Bitcoin, collapsed by 6.42%, crashing below $100,000 from the $107,112 mark. BTC collapsed below the crucial psychological support level, while Ethereum tumbled below $3,300 per coin.

The second-largest crypto demonstrated a major decline of 11.3% within a single day. The continuous US government shutdown raises concerns and fears of delayed debt payments, paused government services. This situation has hit investor confidence hard, pushing it down. All of this has increased the volatility in global financial markets significantly.ё

Crypto market bloodbath continues as BTC and ETH collapse

This massive decline in the leading cryptocurrencies shows a broader market sentiment change as traders and financial institutions are reacting to a new wave of economic instability caused by the US government shutdown. For several weeks, the democrats and republicans were unable to reach an agreement about spending limits for next year. This triggered the partial shutdown of the whole government, and thousands of workers have lost their jobs over this.

This has now become the longest pause in the work of the US government in its entire history, and markets are reacting to this as a sign of a deeper structural crisis in the American economy. In an attempt to seek clarity, investors are dropping risk-on assets, which include the leading cryptos, Bitcoin and Ethereum, and are rushing into the traditional safe haven – gold. Institutions have also been withdrawing large amounts of funds from both Bitcoin and Ethereum spot ETFs lately.

This nuance has also contributed to the Bitcoin and Ethereum prices crashing rapidly. However, both coins have managed to rebound a little.

Buy Crypto

Still, even though the Ethereum price has retraced significantly, this correction took place at a time when Ethereum reached significant tech progress. Shortly before the price collapse, Ethereum developers made a successful launch of the Fusaka upgrade on the final testnte, Hoodie. This marked the final step before it was released on the Ethereum mainnet in December. Fusaka will bring major improvements to Ethereum, namely, it will improve scalability, optimize validator performance, and bring down gas fees for transactions of certain types.

The upgrade will also allow launching Verkle trees later. This is a data structure that will improve Ethereum’s efficiency and increase its throughput substantially, particularly for node operators. While it is not as crucial as the Merge or Dencun forks launched previously, Fusaka represents another firm step towards making Ethereum a stronger and more attractive network for investors and software builders. This is very important since institutions’ interest in Ethereum keeps growing despite the current market decline.

Institutions keep stacking BTC and ETH

Despite the severe bloodbath, some persistent crypto believers continue to accumulate, taking advantage of the price dip. In particular, earlier this week, the treasury company Strategy, helmed by Michael Saylor, acquired 397 Bitcoins for approximately $45.6 million. The firm now holds a total of 641,205 BTC, representing $66,918,013,294.

Besides, Strategy has launched a new Bitcoin-based financial tool, Stream, the company’s first-ever Euro-Denominated Perpetual Preferred Stock, offering it to European and global investors.

As for Ethereum, the Bitmine company, where Tom Lee in the chairman, also continues to stack Ethereum, mirroring Strategy’s tactics but with Ethereum, not Bitcoin.

Their view is also shared by the prominent investor and financial guru Robert Kiyosaki, the author of “Rich Dad Poor Dad”. While he has been a long-standing advocate of gold, silver, and Bitcoin, since September, he has also been endorsing Ethereum. In several tweets, he mentioned that he now stacks not only BTC, but ETH as well, calling it a financial tool that can help one protect their assets against inflation and help one become rich.

In a recent X post, Kiyosaki has again predicted “the biggest market crash” coming, urging the millions of his followers to stack gold, silver, Bitcoin, and Ethereum. While the US government shutdown continues and financial markets are tumbling, both these leading cryptos and their decentralized consensus model seem to be in stark contrast to the obvious fragility of traditional government systems and structures.

Buy Crypto