(Bloomberg) -- The increasing prospects of a US federal government shutdown has some Bitcoin advocates predicting a rally similar to one that happened in response to the regional bank crisis earlier this year. 

“We actually saw Bitcoin rally as a sort of safety-hedge against further banking unrest,” said Stephane Ouellette, co-founder and CEO of FRNT Financial. “It will be very interesting to see if the market going to buy Bitcoin during all different types of periods of US-economic/financial uncertainty or just in a banking crisis context as we saw earlier in the year.”

Bitcoin jumped roughly 25% over a one-month period in March, when three small- to mid-size U.S. banks failed over the course of five days. That was even after a bank run on Silicon Valley Bank, where a portion of stablecoin issuer Circle’s deposits was trapped for several days before they were returned in full to the Boston-based company.   

Bitcoin was little changed on Wednesday at around $26,258. After rallying more than 80% in the first half of the year, the largest cryptocurrency by market value has declined about 14%.

A US government shutdown would have a cascading economic effect. Federal contractors ranging from Elon Musk’s SpaceX to janitorial service providers for local federal buildings are bracing for up to $1.9 billion a day in lost and delayed revenue as funding lapses Oct. 1. The blow would hit as anxiety in financial markets over high interest rates, rising oil prices and labor strikes already weigh on markets.

James Butterfill, head of research at crypto asset manager CoinShares, also predicts that the US governmental disarray will boost the price of Bitcoin.

“We expect the shutdown to exert pressure on the dollar, especially following its recent strengthening, while having a material impact on economic growth in Q4,” Butterfill said. “In some aspects, this scenario bears resemblance to the debt ceiling stalemate experienced earlier this year, which ended up bolstering Bitcoin prices.”

Butterfill notes there is relatively “scant” media coverage and discussion on the shutdown’s effect on Bitcoin prices as compared to earlier this year, signaling a quieter market.

The S&P 500 Index climbed 0.1% on Wednesday, while the Nasdaq 100 advanced 0.4%. Wall Street’s fear gauge — the Cboe Volatility Index or VIX — retreated after hitting its highest level since May, as hopes rise that Federal Reserve officials may soften their hawkish tone on interest rates. Federal Reserve Chair Jerome Powell and other central bank officials are expected to speak Thursday.

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From a regulatory perspective, Noelle Acheson, author of the “Crypto Is Macro Now” newsletter, is skeptical that a shutdown will impact crypto markets or tentative legislation much.

“It will slow the progress of the current crypto bills, but that was going to be slow anyway,” Acheson said. 

Yesterday, the US Securities and Exchange Commission announced its decision to delay ARK’s Bitcoin ETF filing, even though the regulatory body wasn’t required to issue a decision until Nov. 11.  

“As far as I know, the SEC hasn’t said anything about the proposals from BlackRock, Fidelity, Invesco and many others, that falls between the 16th and 19th of October, which could be punted if the government lockdown extends,” Acheson said.  

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