US Government Shutdown Risk Rattles Markets as Crypto Braces for Volatility
Washington's fiscal stalemate threatens to trigger another government shutdown by January 2026, with lawmakers failing to resolve budget disputes before recess. The impasse mirrors the 43-day 2025 shutdown—the longest in US history—which left Core spending disagreements unresolved. Markets now price a 43% chance of renewed deadlock, per prediction platform Kalshi, while Goldman Sachs estimates 20-50% odds.
Extended closures historically amplify financial volatility, particularly in crypto markets already navigating macroeconomic uncertainty. Bitcoin (BTC) and ethereum (ETH) face dual pressure from potential liquidations and shrinking institutional liquidity during political gridlock. Meme coins like DOGE and SHIB remain hypersensitive to risk-off sentiment.
Exchange activity suggests preemptive hedging: Binance and Coinbase spot volumes for stablecoins (USDT, DAI) ROSE 18% this week, while Deribit's BTC options open interest indicates growing demand for downside protection. 'Crypto acts as both casualty and haven during fiscal crises,' noted Galaxy Digital's trading desk. 'Altcoins bleed first, but BTC often rebounds as a narrative asset.'
