The U.S. government shutdown has reached a record 36 days since October 1, 2025, extending a historic disruption that is reverberating across policymaking and markets. The prolonged paralysis jeopardizes key legislation and crypto market decisions, with regulators, exchanges, and projects facing stalled timelines. The impact is particularly acute for institutional investors, product teams, and compliance departments awaiting clarity on ETFs and the broader market framework.
The shutdown, which began on October 1, 2025, became the longest federal disruption on record by surpassing the previous 35-day episode. It stems from Congress’s inability to pass a funding bill or a continuing resolution, with at least 14 Senate votes failing to break the stalemate according to available counts. This is the largest recorded federal disruption and it continues to drag on legislative and regulatory workstreams.
In markets, uncertainty has increased volatility and prompted safe-haven moves. Precious metals have risen during the period, while cryptocurrencies saw pronounced swings, including a notable advance in Bitcoin amid the shifting risk environment.
The suspension of administrative and regulatory activities is slowing the processing of legislative initiatives and application reviews. Reports indicate that bipartisan debates over a crypto market-structure bill in the Senate Agriculture Committee have been impeded or stalled, while the U.S. securities regulator’s reviews of cryptocurrency ETF applications face delays due to reduced Executive operations and legislative uncertainty.
The political landscape adds confidence variables: a White House crypto advisor said initiatives like the Clarity Act remain “full steam ahead,” yet that optimism contrasts with committee blockages and delayed votes. Meanwhile, shifting prediction market odds about the shutdown’s end date are feeding risk decisions on trading desks, influencing positioning and liquidity management.
The crypto market and the effects of the shutdown
Risk of delays in approvals of spot and altcoin ETFs, potentially slowing institutional inflows and AUM growth in tokenized products. With greater uncertainty for the SEC and other regulators, compromising their ability to issue guidance and decisions within predictable timeframes.
Temporary increase in volatility and potential impact on liquidity as traders and treasuries readjust exposures without clear public signals. Operational risks for processes dependent on federal approvals, including licenses, contracts, and CDD/KYC tied to new products.
The end of the shutdown and the full resumption of legislative procedures will set the pace for crypto regulatory approvals; until then, the industry operates with a more diffuse decision horizon and a higher risk premium, calibrating strategies to an uncertain timeline.
