In brief
- Solana, Dogecoin, and Cardano outperformed the broader crypto market on Wednesday.
- Despite Congress failing to pass a continuing resolution to avoid a government shutdown, crypto markets shrugged off concerns.
- Bitcoin surpassed $117,000 for the first time in about two weeks while anticipation builds for an expected 25-basis point Fed rate cut at October's FOMC meeting.
Solana, Dogecoin, and Cardano all showed outsized gains relative to the rest of the crypto market recovery on Wednesday morning.
The broader crypto market capitalization has posted a 3.3% bump since this time Tuesday, according to price aggregator CoinGecko. But SOL increased by 6.3% to $220; DOGE climbed 7.7% to $0.245; and ADA has gained 6.6% to $0.84 at the time of writing.
The U.S. Congress did not get the votes it needed to approve a continuing resolution late Tuesday, which would have averted a government shutdown.
Analysts previously told Decrypt that a shutdown—and the resulting delays to economic reports—could spike volatility in crypto markets. But others told Decrypt that any dip would be temporary and likely be viewed as a buying opportunity.
“If the shutdown drags on, it could delay data releases, suppress consumption and investment, add to concerns about slowing growth, and strengthen expectations for looser policy,” Bitunix analysts said in a note shared with Decrypt. “Safe-haven demand provides short-term support for the dollar and Treasuries, though medium-term outcomes still depend on further Fed action.”
The Federal Open Markets Committee will meet at the end of October to consider whether to adjust federal interest rates—and by how much. Typically, lowered interest rates help buoy risk-on assets like equities and crypto.
On Myriad, a prediction market owned by Decrypt parent company DASTAN, 74% of users are now certain that the FOMC will approve a 25-basis point cut at its next meeting.
In the meantime, Bitcoin has surpassed $117,000 for the first time in nearly two weeks after having gained nearly 4% since yesterday. And Ethereum has picked up 5% in the past 24 hours and has topped the $4,300 mark.
Crypto isn’t alone in shrugging off the reality of a shutdown. The S&P 500 closed near a monthly high Tuesday, even as the CBOE Volatility Index has ticked up by 3% in the past day.
“On fiscal theatre, a U.S. government shutdown should be a market non-event beyond data delays and headline noise,” analysts at Singapore-based QCP Capital wrote in a trading note. “Essential services continue, back-pay limits income effects, and past episodes have not derailed risk assets.”
As for the alts that are outpacing the rest of the market, analysts have said they’re now certain of ETF approvals linked to assets like SOL.
That’s been good news for Solana exchange-traded products that are already trading. Digital asset manager CoinShares noted they pulled in $291 million last week.
One of the recently listed funds, the Rex-Osprey SOL + Staking ETF, has attracted $21.5 million worth of inflows already this week. The fund launched in July and now has $349 million worth of assets under management.