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In a development that could bring new momentum to the cryptocurrency market, the U.S. Senate has reached agreement on a three-part budget deal aimed at ending the prolonged government shutdown. The new prospect of government reopening could quickly stabilize investor confidence, triggering a rally in Bitcoin, Ethereum, and other digital assets currently hampered by ongoing political uncertainty.
- The U.S. Senate has tentatively agreed to a budget deal to end the government shutdown, supporting a path to reopening the government.
- The move could bring much-needed relief to the crypto market, which has been experiencing instability amid political deadlock.
- Bitcoin prices have been extremely volatile, falling more than 17% since early October amid global economic tensions and political uncertainty in the United States.
- Past government shutdowns have historically led to strong gains in Bitcoin, with the recent one rising over 200% after the government shutdown ended.
- Markets are betting on the prospects for a resolution, with prediction markets putting the probability of the shutdown ending within days at more than 50%.
The US cryptocurrency market has been under pressure as a political impasse delayed government funding and increased economic uncertainty. Investors have been closely monitoring legislative developments, recognizing that the reopening of government offices could spark positive sentiment across the blockchain and crypto sectors.
A pending bill to fund the U.S. government has enough support in the Senate to clear the 60-vote threshold, according to sources. This is an important step toward ending a record 40-day shutdown that has disrupted global markets, including the crypto sector.
Earlier this month, Bitcoin initially soared to a high of $126,080 on hopes of an imminent resolution. Since then, the cryptocurrency has fallen more than 17% to around $104,370, according to data from CoinGecko. The market reaction reflects concerns about how a prolonged political impasse could hurt economic growth and investor confidence.
Global economic tensions, including President Donald Trump’s announcement of 100% tariffs on Chinese goods, also contributed to Bitcoin’s decline, pushing its value down by double digits in early October.
Bitcoin’s historic rise after the last shutdown
In the past, Bitcoin has tended to soar after government shutdowns end. For example, during the last shutdown from late December 2018 to January 2019, Bitcoin soared approximately 265%, rising from $3,550 to $13,000 within five months after the stalemate ended.
Market expects shutdown to resolve within days
Betting markets like Polymarket support the possibility that the government shutdown will end soon, with a 54% chance of it ending between Tuesday and Friday of this week. Previously, such a probability was estimated at just 27%, indicating growing confidence among traders and analysts.
Similarly, the Kalsi platform predicts that the 44-day shutdown could end by Friday, further supporting institutional investors’ positive predictions.
Meanwhile, President Trump announced that most Americans will receive a $2,000 dividend from tariff revenue, which will affect about 85% of adults, excluding high-income earners. This financial development adds further optimism for economic recovery and, by extension, the crypto market.
As the political landscape changes, many investors are watching for signs of stabilization. A resolution to the government shutdown could open the next chapter of crypto growth, potentially returning Bitcoin and Ethereum to bullish territory after months of uncertainty.