The effects of the US government shutdown on financial markets and cryptocurrencies

The US government is officially shut down and markets are feeling the effects. Investors are bracing for uncertainty as concerns mount over delays in key economic reports and market volatility is expected to increase.

The beginning of the shutdown, the reaction of the markets

U.S. stock futures fell after lawmakers failed to pass a budget bill, leading to a shutdown. S&P 500 and Nasdaq 100 futures also fell 0.5 percent, the dollar weakened for a fourth straight day and gold hit a new record high of $3,875 an ounce.

The shutdown stems from a dispute between Democrats and President Trump over health care costs, with Trump ratcheting up the pressure by suggesting that many federal employees could be permanently laid off.

Markets are preparing for volatility.

Analysts expect the shutdown to last one to two weeks and have limited economic impact if resolved quickly. The last U.S. government shutdown occurred in December 2018 and lasted 35 days, the longest in history. Although shutdowns halt many government functions, they rarely hurt the stock market in the long run.

Bitcoin is also still strong at $116,419, up more than 3% in the past 24 hours.