Bitcoin Surges to $117K as US Government Shutdown Boosts Safe-Haven Demand

Bitcoin extended its advance on Tuesday, rising 4.27% in the past 24 hours to trade at $117,600, according to CoinMarketCap data.

The latest surge pushed its market capitalization above $2.34 trillion, with trading volumes soaring 21.1% to $69.28 billion. The move outpaced its 3.82% weekly gain, signaling fresh momentum as institutional demand, regulatory clarity, and macro uncertainty converged.

Corporate Tax Clarity Sparks Institutional Optimism

One of the biggest drivers came from the U.S. Internal Revenue Service, which ruled that companies are not required to include unrealized Bitcoin gains when calculating the 15% Corporate Alternative Minimum Tax (CAMT).

This decision eases a potential burden on firms like Strategy (MSTR), which holds over $74.6 billion in Bitcoin and previously faced tax liabilities estimated at nearly $14 billion. The market reaction was immediate, MSTR stock climbed 5.93%, reflecting investor confidence that Bitcoin can now be treated more cleanly as a corporate reserve asset.

Analysts say the move could encourage additional companies to adopt Bitcoin on their balance sheets, a shift that would further reduce liquid supply and reinforce its long-term scarcity value. Investors are now watching Q3 earnings from Bitcoin-heavy firms for signs of how this tax ruling translates into adoption.

Shutdown Uncertainty Drives Hedge Flows

Bitcoin’s rally also coincided with the U.S. government shutdown, which began October 1 after Congress failed to pass a funding deal. Investors turned to safe-haven assets, lifting both Bitcoin and gold. While gold hit an all-time high near $3,890, Bitcoin surged past $117,600, reinforcing its narrative as “digital gold.”

Shutdowns have historically produced mixed results for risk assets. In 2018, equities initially sold off before rebounding as the standoff persisted. This time, Bitcoin’s correlation with safe-haven flows may provide short-term support, though volatility could increase if the funding gap drags on.

Meanwhile, weaker-than-expected ADP jobs data (–32K) boosted speculation of a 0.25% Federal Reserve rate cut on October 29, further fueling demand for alternative assets.

Read More:

Optimism Builds as Crypto ETF Decisions Near Despite SEC Filing Withdrawals

Whale Activity Adds Fuel

Adding to the bullish tone, Tether confirmed a $1 billion Bitcoin purchase, tightening exchange supply and signaling growing institutional trust in BTC as a reserve asset. With circulating supply now at 19.92 million BTC, and the hard cap fixed at 21 million, each large-scale purchase deepens scarcity pressure.

Outlook

With corporate tax relief, a fresh government shutdown, and whale accumulation all converging, Bitcoin is enjoying one of its strongest starts to Q4 in recent memory. The next catalysts to watch are U.S. economic data, Fed rate decisions, and Q3 earnings from corporate holders.

If safe-haven flows persist and institutions continue to accumulate, Bitcoin’s $120,000 resistance level could be tested sooner than expected.