How a US government shutdown will impact XRP

The possibility of US government shutdowns has risen to levels not seen in years, with calci in the forecast market priced at a 73% chance that lawmakers did not pass the funding bill before the October 1 deadline.

The sharp rise reflects several weeks of Gridlock in Congress and President Donald Trump’s decision to cancel budget negotiations with Democratic leaders, which narrowed the path to compromise.

The federal agency will lose its spending authority if lawmakers fail to reach an agreement by midnight on September 30th. As a result, non-critical operations were shut down, reflecting a 34-day standoff during Trump’s first term.

With this in mind, both parties are pointing their fingers above the deadlock.

Former President Barack Obama argued that “Republicans want to shut down governments rather than help millions of Americans pay for health care.”

But the White House countered that Democrats are pushing the nation “on the brink” by putting funds for veterans, seniors and law enforcement at risk.

How will US shutdowns affect XRP?

The outcome of the shutdown extends beyond Washington, especially for the crypto sector.

XRP, the third largest cryptocurrency by market capitalization, is at the heart of several initiatives related to government agencies. The closure will reduce staffing of regulators such as the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), delay or stop reviewing digital asset declarations.

This is because multiple applications in Spot Crypto Exchange-Traded Funds (ETF) that include those linked to XRP are facing an October deadline.

Six companies, including Grayscale and 21 shares, have applied for Spot XRP ETFs. ETF analyst Nate Geraci described the upcoming quarter as “huge” on the review calendar, with decisions expected across various tokens.

Therefore, disruption in regulatory workflows can delay approval.

Additionally, Spot ETFs may hope that the delays will drive new influx of digital assets, as they lower barriers to institutional and retail investors by providing regulated exposure.

Apart from that, Ripple faces a second vulnerability. Bidding for the National Bank’s Charter is a step we touted as important for building a dollar-related payment railroad and relies on reviews by the office of the Secretary of Currency (OCC).

A long-term shutdown will pause these ratings and postpone milestones in Ripple’s US strategy.

Impact on XRP prices

This uncertainty can also ripple over the spot market value of digital assets.

Despite steady institutional interest, tokens have been traded in the range of less than $3 over the past month.

However, technical analyst Ali Martinez noted that the whales have purchased XRP 120 million in the last 72 hours, signaling confidence in the market for renewal.

This sets the stage for a critical period in which XRP can retain its position and potentially build market momentum.

However, this momentum could be reversed if an imminent government shutdown overturns investors’ interest in risk-on digital assets like XRP.

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