The $413k Bitcoin inquiry: What will occur with BTC when Washington resumes operations?

Bitcoin experienced a 290% increase in the five months following the conclusion of the last significant US government shutdown. This 2019 movement, which saw the price rise from approximately $3,500 in late January to nearly $14,000 by June, is now referenced as a potential model for future developments.

The Senate has moved forward with a proposal to resolve the ongoing 40-day shutdown, the longest recorded, while Bitcoin is trading around $105,000 as preparations for Washington’s reopening are underway. The likelihood of the shutdown concluding between November 12 and 15 stands at an all-time high of 87% on Polymarket.

Using the 2019 framework suggests a target of $400,000 or more within six months. However, it is important to note that the surge in 2019 was largely unrelated to the end of the shutdown.

The rally originated from an 80% bear-market low, benefitted from the Federal Reserve’s shift from tightening to easing, and occurred in a market lacking spot ETFs, with minimal institutional custody and leverage structures resembling those of frontier equity markets rather than macro asset classes.

The end of the shutdown provided a narrative symmetry, but the actual catalysts were capitulation, valuation adjustments, and monetary easing. Bitcoin surged because it had limited options but to rise, not due to the government resuming operations.

In 2025, the situation is reversed. Bitcoin achieved an all-time high of $126,200 on October 6, propelled by spot ETF inflows and a favorable pro-crypto policy environment.

Moreover, the shutdown contributed to the rally by leaving certain data undisclosed, prompting investors to seek assets that could preserve their purchasing power, such as gold and Bitcoin.

Nevertheless, the shutdown became the longest in US history and began to impact an evolving crypto regulatory framework. This led to a 20% correction, although the decline initiated from record levels rather than a significant low.

The market currently holds tens of billions in spot ETF assets, record corporate treasury positions, and a $73.6 billion crypto lending portfolio, surpassing the peak of the 2021 cycle and more than double the levels seen in 2019.

This is not a depleted, underowned asset ready for a reflexive surge. It is a trillion-dollar market, intermediated by institutions, where basis trades, derivatives hedging, and profit-taking influence price movements as much as speculative momentum.

Why 2019 happened

The previous shutdown lasted from December 22, 2018, to January 25, 2019. Bitcoin entered this phase trading in the $3,500 range following an 80% decline from its late-2017 peak. Miners capitulated, weaker participants exited, and leverage was unwound.

By the time the government reopened, Bitcoin had established a multi-year low with significantly skewed upside potential: valuations were low, positioning was light, and the remaining sellers were committed long-term holders.

The Federal Reserve provided a supportive macro backdrop. In January and March 2019, Chair Jerome Powell transitioned from a tightening approach to a “patient” stance, indicating the cessation of rate hikes and the initiation of easier policy.

Markets interpreted this pivot as a green light for risk assets, and Bitcoin benefitted from lower real-rate expectations and a weaker dollar.

The crypto-specific environment further supported the movement, as institutional custody infrastructure was developed, derivatives markets matured, and the 2020 halving approached on the forward calendar.

Facebook’s Libra announcement in mid-2019 added a narrative of legitimacy that attracted capital from the sidelines.

The end of the shutdown coincided with these factors but did not cause them. Bitcoin’s rally was a post-capitulation reflation trade that aligned with Washington’s reopening.

The narrative persisted due to its clarity and symmetry, with government dysfunction concluding and risk appetite returning, which contributed to Bitcoin’s rapid growth. However, the underlying mechanism was a reset of leverage and Fed accommodation, not a normalization of fiscal policy.

What changed between cycles

The November 2025 shutdown concludes with Bitcoin above $100,000, unlike the sub-$4,000 valuation in 2019. This valuation disparity alone diminishes much of the asymmetry that facilitated the 2019 rally.

There is significant overhead supply from ETF holders, corporate treasuries, miners who secured forward sales during the rally, and retail participants holding unrealized gains.

Additionally, the market structure has become more professionalized, with spot ETFs now dominating flows, derivatives volumes surpassing spot, and the lending market reaching a record size.

This depth enhances liquidity and reduces volatility, but it also mitigates the kind of sharp, undercapitalized blow-offs that characterized earlier cycles.

The macro environment has also diverged. In 2019, the Fed pivoted smoothly into easing amid low inflation and no external shocks. By late 2025, inflation remains high, tariff policies introduce uncertainty, and the Fed faces limitations on how much further it can ease without jeopardizing price stability.

The shutdown itself hindered data transparency and delayed regulatory approvals, creating an overhang that will be lifted once operations resume. However, this release appears more like the removal of a negative impulse than the introduction of a positive catalyst.

The compression of risk premiums from reopening is significant, but it does not replicate the dovish macro environment that propelled 2019.

Corporate and institutional behaviors present another constraint. In 2019, a few large holders took profits. In 2025, public companies, funds, and ETF sponsors manage billions in Bitcoin exposure.

These entities focus on optimizing risk-adjusted returns rather than maximizing upside. They sell into strength, rebalance during volatility, and hedge through derivatives.

This professionalization stabilizes the market but limits reflexive movements. A 290% increase from $105,100 would necessitate those actors to either hold or buy more aggressively than they did on the way to $126,000.

Furthermore, we are at a markedly different point in the cycle compared to 2019. We are still over 500 days away from the next halving in 2028, which typically signals an impending downturn. In contrast, in 2019, the thaw was already on the horizon.

Neither assumption holds without a macro shock significantly larger than the conclusion of a shutdown.

The bullish case still exists

The reopening of the government alleviates uncertainty. Data releases resume, agency activities restart, and regulatory processes for ETF approvals, exchange listings, and corporate actions proceed as planned.

This clarity is crucial for institutional flows, which have been the marginal price setters since the introduction of spot ETFs. If the end of the shutdown coincides with favorable macroeconomic surprises, such as stronger growth, contained inflation, and further easing by the Fed, Bitcoin could see a substantial rally.

The pro-crypto policy environment remains intact, corporate adoption continues, and the halving supply shock is still unfolding.

The October 10 washout eliminated some leveraged longs. Positioning ahead of a reopening may be cleaner than it was at the October peaks. If pent-up ETF demand and institutional flows return swiftly, Bitcoin could gradually rise toward new highs.

The narrative reflex is also significant, as the 290% projection from the last shutdown draws speculative capital in the short term, even if the analogy is structurally weak. Traders are attracted to symmetry, and the narrative is compelling enough to draw in flows.

If 2019’s movement were to repeat exactly, Bitcoin would trade at $413,400 within six months, a 3.9x increase from its current price of $105,100. Achieving this outcome would require institutional holders to buy more aggressively than they did during the ascent to $126,000, retail to re-enter at scale, and macro conditions to improve significantly.

It would also necessitate no substantial profit-taking, no unwinding of leverage, and no external shocks. These assumptions are ambitious.

A more realistic framework scales down the 2019 effect. If the reopening catalyzes half of the relative movement, Bitcoin would settle near $260,000. If it produces one-third of the impact, it would result in a 97% gain to just above $200,000.

These scenarios assume that the end of the shutdown acts as a reset of local sentiment, rather than the beginning of a multi-cycle reflation trade.

They also assume that institutional and corporate holders act rationally, taking profits during strength, hedging against tail risks, and rebalancing exposure instead of pursuing momentum.

The pertinent question is not whether Bitcoin replicates the 290% increase of 2019, but whether the reopening signifies a local macro low that enables a structurally driven upward movement fueled by ETF inflows, corporate adoption, and regulatory clarity, without the leverage excesses that characterized previous cycles.

Bitcoin does not require a government shutdown to rally. It needs demand to surpass supply at current prices, and the conclusion of the shutdown removes one barrier to achieving that balance.

However, it does not recreate the capitulation, Fed pivot, and underowned market structure that facilitated the surge in 2019.

The $400,000 scenario exists, but it is highly improbable.

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