The U.S. shutdown risk rises to 38% as Congress leaves town without a budget deal. The January 31st deadline fuels uncertainty.
Stagnation in financing negotiations heightens market anxiety. The cryptocurrency could become more attractive as investors turn to Bitcoin amid the political impasse.
The risk of another U.S. government shutdown is rising as Congress leaves Washington for the Christmas recess without finalizing a budget or setting a clear path forward. As the Jan. 31 funding deadline approaches, uncertainty surrounding federal government operations, markets, and broader economic stability increases.
Adding to concerns, data from Polymarket puts the probability of a U.S. government shutdown at 38%, indicating growing public and market anxiety over stalled funding talks.
Budget negotiations stall as lawmakers leave town
Senate leaders reportedly abandoned efforts to pass a funding measure before lawmakers left for vacation. Weeks of negotiations failed to overcome resistance within the committee or secure enough votes to advance the bill. As a result, the council left town without a consensus or clear voting framework in place.
Lawmakers still need to pass nine remaining spending bills, but negotiations remain stalled. Top spending leaders in the House and Senate agreed on overall spending caps, but the agreement only outlined high-level numbers and did not resolve disputes over how funding should be distributed across federal agencies.
Democrats have expressed frustration, saying months were wasted on partisan legislation rather than negotiations. It said it was prepared to proceed under agreed spending limits. But opinions remain divided within the Republican Party, with fiscal conservatives calling for across-the-board funding but warning they will oppose legislation that would increase spending.
Time pressure increases risk of shutdown
The calendar is working against Congress. Even if lawmakers return on Jan. 5, they will have only about three weeks to work before the Jan. 31 deadline. The House is scheduled to adjourn for one of those weeks, further condensing the schedule.
Some lawmakers are now openly acknowledging that another short-term continuing resolution (CR) may be the most realistic option. Some have warned that if they don’t act, they could be shut down with little time to respond once the deadline arrives.
No deal = no funding: is this bad news for cryptocurrencies?
Government shutdowns typically create short-term uncertainty rather than causing outright panic in the market. Past government shutdowns have disrupted the release of economic data and delayed regulatory decisions, adding further strain to an already fragile macro landscape.
In the case of cryptocurrencies, the impact can go both ways. Risk assets may become more volatile as investors become more cautious. At the same time, political gridlock often weakens trust in traditional systems, reinforcing the narrative of Bitcoin as a hedge against government dysfunction. In that sense, short-term noise may strengthen the long-term appeal of cryptocurrencies.
Political recession and market psychology
Cryptocurrency investor Steve Ferguson harshly criticized Republicans, noting that despite years of promises to pass 12 separate spending bills, none have been introduced. He warned that Congress is now headed toward either re-introducing CR at current spending levels or shutting down the government around January 30th, adding that Republicans will “own” the consequences if funding fails.
Meanwhile, public dissatisfaction is boiling over. Commentator Mira Joy reacted to the 38% chance of a government shutdown, calling it an indictment of Washington’s dysfunction rather than a prediction, and accusing Congress of repeatedly taking risks.
With funding negotiations stalled and time running out, the coming weeks will determine whether the U.S. avoids another government shutdown or falls into another one.
