Crypto market observers are preparing for price movements as the historical US government shutdown seems within sight.
The US government is still technically shut down as of publishing time, but a continuing resolution that would fund critical government services through January has made its way from the Senate to the House of Representatives.
The shutdown affects a number of vital federal functions, including the ability for securities and commodities regulators to approve crypto listings. Lawmaking has also ground to a halt, with the possibility of the crypto framework bill passing by year’s end becoming ever smaller.
Following the last government shutdown, Bitcoin’s (BTC) price spiked. But conditions are different now; there are broader headwinds facing crypto markets.
Crypto markets surged after the 2019 government shutdown
The current US government shutdown has now marked its 43rd day, making it the longest in the country’s history. The previous record shutdown lasted 35 days, also under the presidency of Donald Trump during his first term in office.
Government shutdowns occur when Congress cannot agree on a resolution to fund government activities. As a result, the government literally does not have a budget and cannot continue with a number of critical activities. These include dispersing benefits like food assistance for needy families and even paying critical workers like flight controllers.
Related: Senate approves funding bill to reopen US government, awaits vote in House
For the crypto industry, it means agencies like the Securities and Exchange Commission and the Commodity Futures Trading Commission (CFTC) are operating on skeleton crews. The SEC has not been able to render a decision on different crypto-related filings like those for exchange-traded funds (ETFs).
The impact on the economy is undeniable. Greg Daco, chief economist at consulting firm EY-Parthenon, said that there will be “visible and permanent loss of economic activity as a result of the government shutdown.”
But markets, including major cryptocurrencies like Bitcoin, aren’t as affected. This was the case during the 2018-2019 shutdown during Trump’s first term.
Then, Bitcoin’s price did fall around 16%, to $3,500 from around $4,200. But after the government reopened, Bitcoin’s price went on a tear, soaring to $13,000, an almost 300% increase, in just five months.
Nearly seven years later, Bitcoin is down over the course of the shutdown, albeit by a smaller margin of 12%. Bitcoin’s price started the shutdown around $120,000 and is currently trading near $105,000.
Analysts are now looking to another possible bull run in crypto markets once Washington reopens. According to Ben Lilly, an analyst at JLabs Digital and Browns Research, there are “some surrounding catalysts that would create strong tailwinds for the digital asset markets.”
“These catalysts being a possible Federal Reserve rate cut with odds of a 25bps cut currently at 67%, the TGA account adding liquidity into markets as the shutdown ends, the end of quantitative tightening beginning in December per the Federal Reserve, and crypto markets haven’t produced substantial gains in 2025 so we could see firms position themselves in December for 2026 instead of profit taking for tax season like last year,” he said.
Still, Lilly said that the shutdown “has been a wet blanket” for crypto markets. He said it has led to “a loss of momentum that has translated to digital assets missing out on much of the gains realized in equity markets.”
Nic Puckrin, crypto analyst and co-founder of The Coin Bureau, is also uncertain about a post-shutdown boom.
“The crypto market has been struggling to regain momentum since October’s pandemonium, and Bitcoin appears to be fighting one battle after another, dragged down by US dollar strength and higher Treasury yields, long-term holders selling, and macro uncertainty.”
Another stimulus check?
History may not repeat itself, but it rhymes. Citing a massive inflow of revenue from the trade tariffs he began imposing earlier this year, Trump announced that he would be issuing a $2,000 stimulus check to Americans.
During the economic crisis that followed the outbreak of the COVID-19 pandemic, Trump issued similar $1,200 economic stimulus checks to Americans, which saw crypto prices skyrocket.
As the pseudonymous Ash Crypto account on X noted, “Last time this happened, It started the 2021 crypto bull run where Bitcoin pumped from $3,800 to $69,000.”
The Kobeissi Letter, a newsletter on global markets, said they expect a price surge, given the combination of possible rate cuts, record highs and stimulus check: “Buckle up.”
But trading platforms like Robinhood, which saw record volumes as recipients spent their stimulus checks on stocks and crypto, may do well to wait before they celebrate.
Firstly, it isn’t even clear which form, if any at all, the payments would take. Trump said that low- and middle-class Americans would qualify but didn’t elaborate on income levels. He also promised to spend any money left over to pay down the US’s substantial national debt.
Secondly, Trump’s tariff policy is currently under intense legal scrutiny as the Supreme Court deliberates over whether it was legal. The Constitution says Congress has the power to levy tariffs, but over the past year, Trump has imposed new taxes on imported goods without approval or comment from the legislature. If the court rules against Trump, it could cut out a major pillar of his economic policy and his ability to levy and distribute tariffs in the form of a stimulus check.
There are many similar factors affecting crypto between the 2019 and current government shutdowns. But crucial indicators like interest rates, as well as further political turmoil in the Trump administration, make a bullish outcome far from certain.
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