Institutional demand for digital assets increased significantly as investors digested the news that the US Senate had reached a long-awaited agreement that could soon end the 40-day government shutdown.
The U.S. Senate on Sunday proceeded with a procedural vote to end the government shutdown, with the final post-shutdown vote expected to take place on Monday, according to the Senate schedule.
The cryptocurrency market rebounded in response to the report. The Starknet (STRK) token rose more than 43% to be the biggest winner of the day, followed by the Trump-backed World Liberty Financial (WLFI) token, which rose 28% over the past 24 hours, according to data from CoinMarketCap.
Nikolai Sondergaard, a research analyst at crypto intelligence platform Nansen, told Cointelegraph that the nearing end of the government shutdown could reduce “financial anxiety” among global investors and facilitate a recovery in the crypto market.
“For weeks, markets operated in virtual darkness, with all major economic releases, policy updates, and regulatory processes frozen during the shutdown.”
Major announcements backed by federal agencies have been canceled due to the shutdown, so once government operations resume, investors can “price in actual fundamentals rather than speculation,” Sondergaard added.
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Agencies resume ether accumulation as US government shutdown expected to end
Following news that the 40-day government shutdown may end, institutional investors have resumed accumulating Ether (ETH) based on an increase in average spot order data.
According to cryptocurrency intelligence platform CryptoQuant, if Ethereum’s price can sustain above the $3,000 to $3,400 range, Ethereum could enter a period of “low volatility accumulation.”
However, the broader market recovery will ultimately depend on inflows into Bitcoin (BTC) and Ether ETFs, which will ultimately determine whether this recovery generates “sustained institutional demand rather than just retail or short-term flows,” said Nomura Group’s Laser Digital Derivatives Trading Desk in a report shared with Cointelegraph.
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Expectations rise for altcoin ETF “floodgates” as end of government shutdown approaches
In the broader cryptocurrency space, ETF analyst Nate Geraci saw the end of the shutdown as a positive development that opens the floodgates for ETFs.
“End of government shutdown = floodgates open for spot crypto ETFs,” Geraci wrote in a Monday post, adding that this could also introduce the first spot XRP (XRP) ETF under the Securities Act of 1933.
This makes the 21Shares Fund the first XRP exchange-traded product launched under the 1933 Act and the fourth altcoin ETP. The Spot Bitcoin ETF and Ether ETF were also approved under the same framework, but were listed under the Securities Exchange Act of 1934, which requires exchange oversight.
At least 16 crypto ETF applications are currently awaiting approval, delayed by the U.S. government shutdown and now in the 40th day of filing.
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