The likelihood of a US government shutdown from October 1 has risen to 84% on Polymarket. The specter of a shutdown poses dangers for the cryptocurrency market, analysts warned.
“A shutdown of the US federal government is not only political video games in Washington. It creates uncertainty that spills over into world markets, and cryptocurrencies really feel this shock too,” mentioned AvaTrade chief market analyst Kate Lyman in a remark to DL News.
The potential shutdown stems from a lack of settlement on the funds. Democrats are pushing to extend health-care funding. Republicans oppose it, proposing solely to increase the funds briefly till 21 November, Bloomberg wrote.
Earlier, US President Donald Trump predicted excessive odds of a shutdown.
“We’ll proceed negotiations with the Democrats, however I imagine the nation could face a momentary cessation of government operations,” he mentioned.
Based on Reuters, US Vice President JD Vance noted that such an consequence is “inevitable”.
Implications for the crypto market
Within the occasion of a shutdown, the government will cease publishing employment and inflation knowledge. With out these indicators, Lyman mentioned, it turns into “more durable to learn the financial system and predict the following strikes of the Fed”.
The Fed is contemplating a second key-rate lower in October. Financial easing is normally a bullish factor for the crypto market.
“A shutdown [of the government] will sluggish essential progress on crypto coverage,” said Blockchain Affiliation consultant Jessica Martinez in a dialog with CoinDesk.
The CLARITY Act — a invoice that would create a regulatory framework for your complete crypto sector — is at the moment earlier than the authorities. On 18 July, the US Congress approved it. Republicans had deliberate to cross the initiative by the top of September, however within the occasion of a shutdown the timeline will slip.
A shutdown may additionally sluggish work on the SEC, which is reviewing purposes for spot crypto ETFs and developing guidelines for the crypto market.
“A mixture of much less info and slower oversight normally unnerves threat markets. Cryptocurrencies, already delicate to market sentiment, could show even sharper swings,” Lyman mentioned.
What about bitcoin?
Investor Ted Pillows cited historic knowledge. In his view, the S&P 500 and the crypto market normally fall forward of a US government shutdown.
“I reckon this week it could trigger vital volatility,” he emphasised.
A researcher underneath the pseudonym Zac agreed with this view. He known as the shutdown “political theater with short-term prices, however no lasting market harm”.
Government shutdowns = political theater, actual short-term prices, no lasting market harm. Looming 2025 shutdown (Sept 30 fiscal 12 months finish, Oct 1 freeze) has ~66% odds priced in.
Key distinction now: Bitcoin and crypto are tied to macro cycles, liquidity flows, regulatory delays.… pic.twitter.com/h857BFsfU5
— 🛡️Zac (@zacxbtc) September 23, 2025
Web3 researcher Vladimir Menaskop instructed wanting on the scenario by means of three lenses: bureaucratic, political and financial.
In his opinion, though bureaucratic delays and political confusion could provoke a jittery response amongst speculators, the important thing to understanding the outlook lies within the deeper financial context.
“A shutdown isn’t a trigger however a consequence; it’s important to dig deeper: the issue is that the story with tariffs by Trump, for that matter, isn’t clear to everybody and never accepted by all. And generally it’s aimed on the similar because the assist for stablecoins — the return of US dominance within the world financial system. Subsequently I would not overlay the short-term impact (bureaucratic and political) on long-term tendencies: whereas two giants struggle (the US and China), crypto-enthusiasts could nicely really feel comfy, and Net 3.0 and Web3 can develop,” he advised ForkLog.
A possible shutdown in 2025 would not be the primary the crypto market has lived by means of. In October 2013 it lasted 16 days. Bitcoin’s value then rose by 14% — from $132 to $151.
However the first cryptocurrency’s upward pattern in such durations isn’t a rule. The longest shutdown started in December 2018 and lasted 35 days. Over that point, the worth of digital gold fell by 6% — from $3802 to $3575.
CryptoQuant head of analysis Julio Moreno famous that throughout the shutdowns in 2013 and 2018 bitcoin was “in utterly completely different markets”.
“Demand for the asset was rising strongly because it was getting into the ultimate stage of a bull cycle [in 2013],” he advised Decrypt, including that by the point of the 2018 shutdown demand for the cryptocurrency was shrinking throughout a bear market.
In his view, bitcoin at the moment appears to be like extra prefer it did in 2013 than in 2018.
On the time of writing, digital gold is buying and selling round $113,400. Over the previous 24 hours its value has risen by 1.2%.
Earlier, Glassnode analysts recorded a capitulation of bitcoin speculators. Market members instructed the correction is nearing its finish.
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