The cryptocurrency market has surged, influenced by progress in Washington regarding the federal budget crisis. The U.S. Senate’s passage of the budget bill has clarified the path to reopening the federal government, positively impacting global investor sentiment. The “Crypto Fear & Greed Index” rose from 22 to 29, and the market value increased by approximately 4.6%, reaching $3.66 trillion.
The Shutdown’s Impact on Crypto
During this recovery, Bitcoin increased by 4% in 24 hours to $105,990, Ethereum rose by 7% to $3,622, XRP jumped 8.7% to $2.46, and Solana climbed 6.5% to $167. Additionally, around $338 million in liquidations occurred within the past 24 hours, and open interest volume reached $148 billion, indicating that some investors began taking positions again following the pullback.
The shutdown started on October 1 due to disagreements over federal spending priorities and lasted for several weeks. Many government functions halted, employees were furloughed, and numerous regulatory processes, including digital asset regulation, slowed down. This uncertainty adversely affected crypto assets due to liquidity constraints and unclear policy direction.
Although the Senate’s bill did not offer a complete solution, it was the first significant move in weeks of inaction. If the remaining legislative steps are completed without delay, government operations could resume in days, and markets are already pricing in this possibility. This situation could signal the end of a “wait-and-see” period in the crypto market.
The Importance and Expectations of Regulatory Processes
The shutdown not only disrupted government operations but also slowed down the functioning of regulatory bodies, particularly the SEC and CFTC. Examinations of ETF applications, stablecoin regulations, and token listings were delayed. This uncertainty raised the question in the crypto market: “When will regulatory clarity be established?”
Analysts expect an influx of $180 billion to $300 billion into the market in the coming weeks, similar to past post-shutdown periods. For instance, after the 2018-2019 shutdown, stocks and Bitcoin achieved significant gains. In this context, investor confidence is rising, with risk appetite possibly returning as exits from highly volatile assets increased during the shutdown.
In summary, the post-shutdown outlook is positive for crypto, but the recovery is not entirely secure. Regulatory uncertainty persists, and the legislative process is incomplete. Investors should pay attention to indicators: the government reopening, resumption of regulatory bodies’ activities, and approval of significant applications like ETFs could create new momentum in the market. However, while interpreting this process positively for now, it would be wise to consider other potential economic risks.