America faces the risk of a government shutdown, the crypto market is in turmoil ahead of the deadline on 1/10.

The probability of America having to shut down the government has reached a record high on Polymarket, with a 79% chance that lawmakers will not be able to pass the budget package before the October deadline. Bipartisan negotiations are at an impasse, while President Donald Trump has canceled several crucial meetings, causing both sides to remain inflexible. This deadlock is increasing the risk of prolonged disruptions in the operations of many government agencies.

What does a government shutdown in America mean?

If it happens, hundreds of thousands of federal employees will immediately stop receiving their salaries. Administrative procedures such as passport processing will be delayed, national parks will close, and some social programs like nutrition assistance (SNAP) or healthcare funds may be affected.

Important economic reports – which are key data for investors in assessing market trends – are also at risk of being delayed in publication, increasing volatility and limiting the perspective of the financial community.

The special point of this confrontation is that both major parties see political benefits in not compromising. Analysts warn that the likelihood of reaching an agreement is decreasing as the deadline approaches. If it occurs, a government shutdown could last from a few days to a few weeks, depending on the speed of the resumption of negotiations by Congress.

Impact on Bitcoin and the cryptocurrency market

The risk-averse mentality due to concerns over a government shutdown has shaken the crypto market. Bitcoin, Ethereum, and many major coins have all experienced significant declines. During the day, the price of Bitcoin fluctuated between 108,780 USD and 113,700 USD, while capital flowed strongly into stablecoins and defensive assets. In contrast, memecoins and high-volatility tokens suffered double-digit declines.

Crypto-related ETFs have reported significant outflows. Some analysts warn that uncertainty surrounding the government budget and the delay in economic data could prolong price volatility, undermining confidence in risk assets. Ash Crypto commented:

"In the past, the shutdown of the American government has led to market adjustments – that is why investors are confused."

Regulatory agencies such as the SEC and CFTC are likely to also stall or halt non-essential activities, leading to delays in the approval of new ETFs, slowdowns in processing enforcement cases, and the issuance of policies for digital assets.

In addition, the strengthening USD – often considered a safe-haven asset during periods of instability – is further putting pressure on Bitcoin, leading to a decrease in buying demand. Investment institutions are tending to shift towards short-term credit, stablecoins, and real assets to manage risks in this uncertain cycle.

Prospects

The likelihood of America having to shut down the government is higher than ever as the political deadlock continues in Washington. The impact will ripple through many agencies and public services, creating significant instability for the economy, financial markets, and even cryptocurrencies.

For digital assets, strong volatility, delayed policies, and a defensive trend may continue until Congress reaches a compromise and the government resumes activities. Crypto investors are closely watching the deadline of 1/10, the start of "Uptober" – but it may not be the bright month they hope for.

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