Here are full details on how the United States federal government shutdown is affecting the crypto market—what’s happening, why it matters, and what to watch out
✅ What is happening
The U.S. has entered a government shutdown because Congress failed to pass a funding bill.
This shutdown has become one of the longest on record, exceeding previous thresholds.
Several federal agencies are operating only with skeleton crews; many regulatory, oversight and policy efforts are delayed.
⚙ How it’s impacting the crypto market
Liquidity & macro-environment
There’s a contraction of liquidity in the broader financial markets tied to the shutdown. One report estimates about $200 billion being withdrawn or constrained because of the uncertainty.
Because the macro environment is more fragile (uncertain government operations, delayed economic data, weaker growth outlook), risk assets including crypto face a tougher backdrop.
Regulatory / policy delays
Key regulatory agencies like the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are slower; this delays approvals of things like crypto-ETFs, stablecoin regulation, and other oversight work.
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Market price / investor behaviour
Some cryptocurrencies initially rose on the announcement of the shutdown, possibly because investors viewed crypto as an alternative asset or safe-haven in times of uncertainty. For example, in one article, key cryptocurrencies were up ~2-5% right after the shutdown started.
But the picture is mixed: in previous shutdowns of the U.S., crypto such as Bitcoin has both gained (e.g., +14 % in 2013) and lost value (e.g., ~-6 % in 2018-2019) during shutdowns.
The current extended shutdown is increasing volatility: less clarity on macro data + weaker regulation + liquidity pullback = more risk in the crypto market.
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