How have geopolitical events like the U.S. government shutdown and macroeconomic shifts such as Federal Reserve rate cuts affected Bitcoin’s market performance?
Correct Answer
The US government shutdown introduced uncertainty in traditional markets, prompting investors to seek alternatives like Bitcoin. At the same time, Federal Reserve rate cuts and a weakening dollar reduced the attractiveness of fiat assets, enhancing Bitcoin’s appeal as an inflation hedge and safe‐haven, thereby boosting its market performance.
Why is this the correct answer?
This is correct because geopolitical events that trouble established financial systems often drive capital toward decentralized assets. Lower interest rates make yield‐bearing fiat investments less attractive, so investors allocate more to assets seen as preserving value or offering growth, like Bitcoin.