Longest U.S. Government Shutdown Impacts Crypto Markets

The U.S. government has experienced its longest-ever shutdown, now over 40 days, impacting traditional markets and causing uncertainty in the crypto sector.

This situation has stalled SEC operations, delaying ETF approvals, affecting assets such as XRP and stETH, while Bitcoin  BTC -2.55% and gold have shown increased market activity.

The current U.S. government shutdown has surpassed 40 days, marking it as the longest in history. This period of inactivity has brought about substantial impacts on various sectors, notably the crypto market, introducing both uncertainty and volatility. President Donald Trump has acknowledged ongoing negotiations with the Democrats, suggesting a possible temporary cessation of government operations while Vice President JD Vance terms the outcome as “inevitable.”

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Immediate effects include halted SEC operations, notably delaying approvals of various crypto ETFs. Bitcoin has shown resilience, rallying amid the uncertainty, while other assets experience fluctuating values amid constrained regulatory actions. Financially, the stall affects XRP, stETH, and various altcoins awaiting approvals. Institutional interest remains, evidenced by a significant rise in crypto engagement at Charles Schwab, coinciding with market volatility across sectors.

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Historically, previous shutdowns caused short-term volatility with limited long-term effects. A Web3 researcher noted crypto’s resilience amid macro cycles.

Jessica Martinez, Blockchain Association, “A shutdown [of the government] will slow critical progress on crypto policy.” Coin Central

Emphasizing short-term costs without lasting market impact. Potential outcomes foresee financial and regulatory ripple effects, with key figures predicting swift market adjustments post-shutdown. Historical data suggests that despite immediate impacts, the crypto sector may gain strength once operations resume.