Latest / The Paul Barron Crypto Show / Government Shutdown vs Crypto🚨Market Update📈

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Government Shutdown vs Crypto🚨Market Update📈 · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Let's get into the shutdown showdown. It's going to be
• 0:02
  Speaker 1: a good one. Welcome back into the show. I do
• 0:04
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• 0:30
  Speaker 2: Also do that as well.
• 0:32
  Speaker 1: Use our link. It does help the channel. Let's chip
• 0:34
  Speaker 1: over to poly market. This is how many days the
• 0:36
  Speaker 1: federal government could be shut down in twenty twenty five
• 0:39
  Speaker 1: right here, and you can kind of see the leading
• 0:41
  Speaker 1: one right now says four to nine and then you
• 0:43
  Speaker 1: have the ten to twenty nine days. That would be
• 0:46
  Speaker 1: the second longest shutdown that we've had really since Trump
• 0:51
  Speaker 1: has been president. Remember this first term he did. I
• 0:53
  Speaker 1: think it was thirty five days. So the impact on
• 0:56
  Speaker 1: market though, that is a little different. One thing I
• 0:58
  Speaker 1: do want to play for you guys as a clip
• 1:00
  Speaker 1: because this will get into whether or not and what
• 1:03
  Speaker 1: Trump can do during this shutdown.
• 1:06
  Speaker 2: Take a look.
• 1:07
  Speaker 3: We can do things during the shutdown that are irreversible,
• 1:12
  Speaker 3: that are bad for them and irreversible by them, like
• 1:15
  Speaker 3: cutting vast numbers of people out, cutting things that they like,
• 1:18
  Speaker 3: cutting programs that they like of commerce.
• 1:20
  Speaker 4: Also, Warren lawmakers that the economy is set to take
• 1:23
  Speaker 4: a hit. During the partial government shutdown in twenty eighteen
• 1:26
  Speaker 4: twenty nineteen, businesses lost about eleven billion. About three billion
• 1:31
  Speaker 4: of that was never recovered, and that is according to
• 1:34
  Speaker 4: the Congressional Budget Office numbers the Chamber cited. And remember
• 1:37
  Speaker 4: this time we have a full government shutdown, it's not
• 1:40
  Speaker 4: partial like the last time. And then the other thing
• 1:42
  Speaker 4: of course, guys, today, as the Senate gets back underway,
• 1:45
  Speaker 4: we saw three Democrats yesterday cross lines vote with Republicans
• 1:50
  Speaker 4: to continue that short term government funding. A lot of
• 1:53
  Speaker 4: questions whether they will be joined by more colleagues today. Remember,
• 1:56
  Speaker 4: they need to get sixty votes, so they need to
• 1:59
  Speaker 4: get eight Democrats in total voting for this. We'll see
• 2:03
  Speaker 4: if they get those numbers today.
• 2:06
  Speaker 1: Remember that's only going to be a short term fix.
• 2:09
  Speaker 1: I think this is a longer term negotiation that continues
• 2:11
  Speaker 1: to play out between Republicans and Democrats. The interesting point
• 2:15
  Speaker 1: is the labor market implications, because this is where it
• 2:18
  Speaker 1: will get a little bit diesier, because this will affect
• 2:21
  Speaker 1: I think the economy and it also could affect markets.
• 2:24
  Speaker 2: Let me go to that clip. Take a look.
• 2:26
  Speaker 5: If a potential shutdown is resolved by mid November, we're
• 2:30
  Speaker 5: not going to see any impacts when it comes to
• 2:32
  Speaker 5: fourth quarter growth. Can you put into context for us,
• 2:36
  Speaker 5: is there a buffer room, buffer timeline when it comes
• 2:39
  Speaker 5: to the potential economic impacts, particularly when we are thinking
• 2:42
  Speaker 5: about the labor market.
• 2:43
  Speaker 6: For example, he has already fired hundreds of thousands of
• 2:47
  Speaker 6: federal workers, and we're anticipating seeing that show up not
• 2:52
  Speaker 6: in this week's vierea of Labor statistics report, but in
• 2:55
  Speaker 6: the following one. That is an example of Trump administration
• 3:00
  Speaker 6: policy that's going to start dragging on the labor market
• 3:02
  Speaker 6: pretty heavily, but we haven't seen it flow through yet.
• 3:05
  Speaker 6: I think in thinking about the economic impacts, healthcare has
• 3:09
  Speaker 6: been a huge source of job growth. In fact, it's
• 3:12
  Speaker 6: been responsible for about half of the jobs created this year,
• 3:16
  Speaker 6: and those cuts are going to have real economic repercussions.
• 3:22
  Speaker 1: I'm going to agree with that because there are a
• 3:24
  Speaker 1: couple of things that I've been saying for a while,
• 3:27
  Speaker 1: and that is jobs, to me, are still the most
• 3:30
  Speaker 1: important metric that the economy is going to deal with.
• 3:34
  Speaker 1: The Other thing that's playing into this is we are
• 3:35
  Speaker 1: already starting to see a slow down in retail traffic.
• 3:39
  Speaker 1: There's implications on credit, consumer credit. You add this to
• 3:43
  Speaker 1: the fire, and I don't know that they can come
• 3:45
  Speaker 1: back from this. So the BLS data may come in
• 3:47
  Speaker 1: a little bit softer, well a lot softer.
• 3:49
  Speaker 7: All right.
• 3:50
  Speaker 1: A couple of points here is there's going to be
• 3:51
  Speaker 1: a lack of data that's going to be supplying the
• 3:53
  Speaker 1: industries out there. Economic data is suspended during the shutdown.
• 3:57
  Speaker 1: What that will include as job has claimed, nonfarm CPI,
• 4:01
  Speaker 1: retail sales, all this, Most of this is being factored
• 4:04
  Speaker 1: into a lot of decisions by the Fed as well,
• 4:07
  Speaker 1: even though most of the time, at least on the
• 4:10
  Speaker 1: jobless data, it has been wrong all along for at
• 4:13
  Speaker 1: least the last year, So that one may not hurt
• 4:16
  Speaker 1: them so much. Maybe that'll go forward, but historically the
• 4:18
  Speaker 1: FED had shifted a little bit more dubbish on average
• 4:21
  Speaker 1: during these shutdowns, so that might be good for markets.
• 4:24
  Speaker 1: I don't necessarily like not having the data because it
• 4:27
  Speaker 1: will be a window into where the markets could be
• 4:31
  Speaker 1: going in the near future. So flying blind here is
• 4:34
  Speaker 1: not a good thing in my opinion when you look
• 4:36
  Speaker 1: at this, even if there are issues where all the
• 4:39
  Speaker 1: data is not as accurate as it can because they
• 4:41
  Speaker 1: make their decision on that data. Right now, how many
• 4:45
  Speaker 1: FED rate cuts in twenty twenty five, It looks like
• 4:47
  Speaker 1: it is going to be two more, and that is
• 4:49
  Speaker 1: zooming in on the three quarter point basis cuts that
• 4:52
  Speaker 1: will occur, most likely one coming the end of October
• 4:56
  Speaker 1: and another in December.
• 4:58
  Speaker 2: Whether or not we get one in January is the question.
• 5:00
  Speaker 1: We'll see how this plays out. But there are good
• 5:03
  Speaker 1: signals here. And just notice that this is because remember
• 5:06
  Speaker 1: this was back on the what was at the twentieth
• 5:09
  Speaker 1: of September, It was at sixty six percent. It dropped
• 5:13
  Speaker 1: down dramatically after we had these dips in the market,
• 5:16
  Speaker 1: and then now since the government shutdown, it is spiked
• 5:19
  Speaker 1: back up to sixty eight percent now for the potential
• 5:22
  Speaker 1: of two more radcuts. So get ready, guys. I think
• 5:25
  Speaker 1: they are coming. It's going to be validated. The question
• 5:27
  Speaker 1: is how long is this shutdown? There is a lot
• 5:30
  Speaker 1: of disagreement, of course between the parties, is all in
• 5:33
  Speaker 1: relationship to immigration, healthcare, all these issues that are talking points.
• 5:38
  Speaker 1: But the real question is what happens next.
• 5:41
  Speaker 2: Let's take a look at this clip.
• 5:42
  Speaker 7: It's a good question. I mean, Republicans are pretty insistent
• 5:46
  Speaker 7: that they're not going to cave, and they feel like
• 5:48
  Speaker 7: they have the upper hand. They have passed a clean
• 5:51
  Speaker 7: funding bill to extend funding until November twenty first. And
• 5:54
  Speaker 7: we saw last night Andrew that more Democrats voted two
• 5:58
  Speaker 7: more Democrats voted for the clean cr when Republicans put
• 6:01
  Speaker 7: it up. So John Thune is going to go to
• 6:02
  Speaker 7: the floor today and over the weekend Friday, Saturday, and
• 6:07
  Speaker 7: he's going to keep putting up this bill and hope
• 6:09
  Speaker 7: that more Democrats fold. So I think that's what's going
• 6:13
  Speaker 7: to happen. There's not going to be a deal. I mean,
• 6:15
  Speaker 7: the deal that's going to take hold is the deal
• 6:18
  Speaker 7: that's already on the table, which is extend government funding
• 6:20
  Speaker 7: for seven weeks. And have this fight again in seven weeks,
• 6:23
  Speaker 7: or have some sort of fight over the next seven weeks.
• 6:25
  Speaker 7: And I'll just add this. This what Democrats are demanding here,
• 6:29
  Speaker 7: the extension of these enhanced tax credits for Obamacare. Republicans
• 6:33
  Speaker 7: are not for that. This is not like an appetizing
• 6:36
  Speaker 7: Usually you shut down the government because you want there's
• 6:39
  Speaker 7: something that you want that you think the other party
• 6:41
  Speaker 7: will be interested in. Here, Republicans just plainly aren't.
• 6:45
  Speaker 2: Interested in that.
• 6:45
  Speaker 7: So I think this fight is going to end in
• 6:48
  Speaker 7: the next week or ten days, and then it's going
• 6:52
  Speaker 7: to be rejoined again over the next seven weeks.
• 6:56
  Speaker 1: All right, So as you can see, this is a
• 6:59
  Speaker 1: sticky situation. There's a lot that is going to play out,
• 7:03
  Speaker 1: I think, And again remember this is short term, so
• 7:05
  Speaker 1: we could see this revisited again.
• 7:07
  Speaker 3: Now.
• 7:07
  Speaker 1: I don't know what this is going to do in
• 7:08
  Speaker 1: terms of the market, but the likelihood is that we
• 7:10
  Speaker 1: could continue to see a little bit of maybe a
• 7:13
  Speaker 1: flight to safety in terms of risk assets. I think
• 7:15
  Speaker 1: that's what we're seeing right now with bitcoin at above
• 7:18
  Speaker 1: one seventeen, is this shutdown is occurring.
• 7:21
  Speaker 2: Here's the facts.
• 7:22
  Speaker 1: The media is not covering the average length of a
• 7:24
  Speaker 1: shutdown is around eight days. The S and P five
• 7:27
  Speaker 1: hundred has ended higher one year after a shutdown eighty
• 7:30
  Speaker 1: six percent of the cases. The S and P five
• 7:32
  Speaker 1: hundred also posting an average game of thirteen percent one
• 7:35
  Speaker 1: year after.
• 7:35
  Speaker 2: The shutdown ends.
• 7:36
  Speaker 1: So it seems and appears that the markets don't necessarily
• 7:40
  Speaker 1: care about this, and at least in direction, unless it
• 7:45
  Speaker 1: is affecting something that is definitive to how the market operates.
• 7:49
  Speaker 1: And I think that that actually there may be and
• 7:52
  Speaker 1: that is Clarity Act and ETFs, both of those could
• 7:55
  Speaker 1: have some bearing now granted not on the S and
• 7:57
  Speaker 1: P five hundred, but definitely on the crypto market. So
• 8:00
  Speaker 1: be in consideration of that US government shutdown may signal
• 8:04
  Speaker 1: a crypto market bottom. These are analysts that are kind
• 8:06
  Speaker 1: of coming in on this very topic and you got
• 8:09
  Speaker 1: to look at it. Here's the shutdowns over since nineteen
• 8:12
  Speaker 1: seventy six. The big one was back in twenty eighteen
• 8:14
  Speaker 1: under Trump thirty five days. That was the biggest one
• 8:17
  Speaker 1: that had been out there. Real question though, again, how
• 8:21
  Speaker 1: to safe haven assets play into this? Could do everything
• 8:24
  Speaker 1: from bitcoin, gold as well as what now will be
• 8:28
  Speaker 1: is some of the key blue chips in terms of
• 8:31
  Speaker 1: all coins out there as well. We put out a
• 8:34
  Speaker 1: poll Crypto seems to not really give a f about
• 8:37
  Speaker 1: the shutdown. Higher from here is the number eighty five
• 8:40
  Speaker 1: percent are pushing on this cycle, continuing to act like
• 8:46
  Speaker 1: this cycle, and that is a high October, possibly a
• 8:51
  Speaker 1: very active November. The real question will be is there
• 8:54
  Speaker 1: more sticky points in November? If this shutdown has to
• 8:58
  Speaker 1: be extended into that period time. If the data worsens,
• 9:03
  Speaker 1: the question is can the FED respond faster. Here's a
• 9:07
  Speaker 1: clip that kind of explains that.
• 9:09
  Speaker 8: A lot depends on what the administration does, if there's
• 9:12
  Speaker 8: permanent firings, if there's not that much back pay that's
• 9:15
  Speaker 8: given back, you know, if you see a longer shutdown
• 9:18
  Speaker 8: with an impact on the economy, I think the front
• 9:20
  Speaker 8: end will move as well, because, yes, the market's pricing
• 9:23
  Speaker 8: in the FED cutting gradually to neutral. But if we
• 9:27
  Speaker 8: see the economic data worsen, if we see the unemployment
• 9:29
  Speaker 8: rates starting to move higher than say four and a half,
• 9:32
  Speaker 8: I think the FED gets a lot more active. And
• 9:35
  Speaker 8: they may not have a lot of data, but they're
• 9:38
  Speaker 8: going to look at, you know, sentiment, They're going to
• 9:40
  Speaker 8: look at other measures of data, and if things are
• 9:42
  Speaker 8: slowing down, I think they can cut faster if the
• 9:45
  Speaker 8: economic data worsens. I would say that front end has
• 9:48
  Speaker 8: room to decline because the market's going to price a
• 9:51
  Speaker 8: much more aggressive FED cutting cycle.
• 9:54
  Speaker 1: I'm in agreement with that in the sense that if
• 9:57
  Speaker 1: this does have kind of that trickle effect into the
• 10:00
  Speaker 1: job side of things, because remember, jobs will stimulate cost
• 10:04
  Speaker 1: cutting within the economy, people just not spending money, Prices
• 10:07
  Speaker 1: will inherently drop, inflation will drop, et cetera. Those kind
• 10:10
  Speaker 1: of things will happen if you see enough of an impact.
• 10:13
  Speaker 1: So key here, as if this extends more than a
• 10:16
  Speaker 1: couple of weeks, that could start to get a little
• 10:18
  Speaker 1: bit more dicey. And as Trump even said on that
• 10:21
  Speaker 1: early clip, there's a lot of things that are irreversible
• 10:24
  Speaker 1: that may not be able to be fixed because that
• 10:26
  Speaker 1: income is just lost. So it's not out in the economy.
• 10:30
  Speaker 7: Be on the.
• 10:30
  Speaker 1: Lookout for that FED decision in October. Question mark right now,
• 10:34
  Speaker 1: it looks pretty good ninety one percent for a quarter
• 10:36
  Speaker 1: basis point.
• 10:37
  Speaker 2: As I'll zoom in right.
• 10:38
  Speaker 1: There, you guys can kind of see it another quarter
• 10:41
  Speaker 1: basis point for October. I anticipate we'll see one in
• 10:44
  Speaker 1: December as well, which simply means we're going to continue
• 10:47
  Speaker 1: to see an upward trend on these markets. Thomas Lee,
• 10:51
  Speaker 1: Mister Tom Lee kind of goes in right here on
• 10:54
  Speaker 1: sign a signal strength of markets. This is just showing
• 10:57
  Speaker 1: the second best September in the past twenty seven years,
• 10:59
  Speaker 1: which which is really kind of slightly up. But the
• 11:02
  Speaker 1: point is that Tom's getting is is this potentially carries
• 11:06
  Speaker 1: us in to a very active October. Other points that
• 11:10
  Speaker 1: could be bullish are the old guard is continually getting
• 11:14
  Speaker 1: it wrong. Morgan Stanley Wealth Management, they were worried, they
• 11:16
  Speaker 1: were telling clients to get diversified, cutback on US stocks
• 11:19
  Speaker 1: and boom.
• 11:20
  Speaker 2: Of course, here we are at all.
• 11:21
  Speaker 1: Time highs on gold stocks and bitcoin getting ready to
• 11:25
  Speaker 1: make an all time high in twenty twenty five. So
• 11:28
  Speaker 1: Morgan Stanley unfortunately not in the game right here.
• 11:34
  Speaker 2: Shorts are getting torched. Guys.
• 11:36
  Speaker 1: This is one of the key things that we've seen
• 11:37
  Speaker 1: in the markets, both on bitcoin and ethereum. This is
• 11:40
  Speaker 1: why you're seeing the movement we're seeing right now in
• 11:42
  Speaker 1: the markets, and I think we're going to continue to
• 11:44
  Speaker 1: see this up and down movement in October. Many people
• 11:47
  Speaker 1: are calling for an all time high. I just talked
• 11:49
  Speaker 1: to one analyst this morning, and his all time high
• 11:53
  Speaker 1: for bitcoin he called in October. So this will be
• 11:56
  Speaker 1: interesting to see if bitcoin accelerates in to anywhere between
• 12:01
  Speaker 1: a one to twenty five and one to fifty number,
• 12:03
  Speaker 1: which is kind of his window, even though Tom Lee
• 12:06
  Speaker 1: is kind of pointing at that two hundred k by
• 12:08
  Speaker 1: the end of the year. Cz of course has a
• 12:10
  Speaker 1: perfect record for calling dips and is it dips or
• 12:14
  Speaker 1: is it him simply saying this is how it's going
• 12:16
  Speaker 1: to play out, guys, And he's right, this is definitely
• 12:20
  Speaker 1: on point.
• 12:21
  Speaker 2: These are somewhat bullish signs.
• 12:24
  Speaker 1: I think in general people will look at where the
• 12:26
  Speaker 1: market is right now and also some of the key
• 12:29
  Speaker 1: market structure that's happening in terms of all coins, which
• 12:33
  Speaker 1: I think are playing into this avalanche. Of course, had
• 12:36
  Speaker 1: a nice move back above thirty bucks. Along with that,
• 12:38
  Speaker 1: one of our partners, SUI getting ready to announce something
• 12:41
  Speaker 1: huge in DeFi tomorrow. So I'm watching Adenie very closely.
• 12:46
  Speaker 1: Most likely this is going to end up over in
• 12:49
  Speaker 1: this protocol right here. I believe it's going to be
• 12:53
  Speaker 1: correlated to what's happening in bluefin. All of these are
• 12:56
  Speaker 1: in the green too if you just look at the
• 12:57
  Speaker 1: one day and the seven day change. This in terms
• 13:00
  Speaker 1: of TVL has continued to do very well in the
• 13:04
  Speaker 1: suite ecosystem again one of the top tokens that I
• 13:07
  Speaker 1: think will be a winner for twenty twenty five. So
• 13:10
  Speaker 1: if you guys want those and more of them, make
• 13:13
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• 13:15
  Speaker 1: a Baron Market Edge each week to you and a
• 13:19
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• 13:21
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• 13:24
  Speaker 1: our research, So make sure and subscribe down below is
• 13:27
  Speaker 1: absolutely free. Catch me out there on X at Paul Baron.
• 13:30
  Speaker 1: We'll catch you next time right here on The Paul
• 13:32
  Speaker 1: Baron Show.