The probability of the US government shutdown is at an all-time high for Polymet, with 82% of lawmakers unable to pass the funds they need before the October deadline. When bipartisans talk about food stalls and major meetings are cancelled by President Trump, it seems that both parties don’t want to be upset. The deadlock has increased the risk of long-term disruption across government services.
Meaning of US government closure
If the US government shutdown occurs, the salaries of hundreds of thousands of federal employees will be suspended immediately. It can delay procedures such as passport processing, disrupt national parks, and impact social programs such as supplementary nutrition support and medical funding.
Important economic reports investors use to assess market trends may be postponed, causing increased volatility and limited visibility for financial experts.
This standoff is unique as both major political parties see political advantages when refusing to compromise. Analysts warn that the likelihood of a resolution is declining as the deadline approaches. Depending on how quickly lawmakers return to negotiations, the US government closure could last for days to weeks.
Impact on Bitcoin and crypto markets
The rising risk-off sentiment created by the fear of shutdowns has already rattled the crypto market, causing a sharp pullback of Bitcoin, Ethereum and other major coins.
Investors flocked to stubcoins and defensive assets as Bitcoins swings between $108,780 and $113,700, while Memocoins and High Volatile Tokens suffer double-digit declines.
Key crypto chained ETFs have experienced significant leaks, with some analysts warning that the uncertainty surrounding delays in government funding and economic data releases could prolong price fluctuations and undermine confidence in risky assets. Ash Crypto pointed out:
“In the past, US government closures have resulted in market corrections, which is why people are panicking.”
Regulators such as the SEC and CFTC can delay or suspend non-essential activities to delay new ETF decisions, enforcement actions, and policy guidance on digital assets.
Stronger US dollars, often considered safe havens during periods of global uncertainty, also affect risky assets such as Bitcoin, making them less attractive to buyers and reduces overall demand. In response, institutional investors pivoted towards short credits, stub coins and real assets to manage volatility during the shutdown risk cycle.
With political gridlocks persisting in Washington, the US government seems likely to be shut down more than ever. This effect is felt across government agencies and services, with widespread economic uncertainty rippling into financial and crypto markets.
For digital assets, continuous volatility, regulatory delays, and defence strategies may continue until political compromises are reached and government operations resume. All eyes are on Washington and the deadline for October 1st. This may not be the best start to “up-to-ver” crypto investors are hoping for.
