U.S. Shutdown, Bullish For Crypto!

 

After the longest U.S. government shutdown on record, a 43-day shutdown that ended in November 2025, markets and lawmakers are once again watching Washington as another funding deadline approaches.

As 2026 gets underway, concerns about an immediate shutdown are cooling. Prediction markets now place the odds of a U.S. government shutdown in January at 26%, down sharply from late-2025 highs.

Funding Law Lowers Immediate Risk

A key reason for the calmer outlook is a major funding package passed in 2025, commonly known as the One Big Beautiful Bill Act. The law pre-funded a large portion of federal government operations through September 2026, covering an estimated 85% to 95% of total federal spending.

Because much of the government is already funded, fewer agencies are dependent on short-term continuing resolutions. This significantly reduces the risk of a full-scale shutdown even if budget negotiations stall.

That said, the protection is not total. Congress must still pass additional appropriations or approve a temporary funding extension by January 30, 2026. Failure to do so could trigger a partial government shutdown affecting select agencies.

Shutdown Odds Fall to 26%

Data from prediction market Kalshi shows shutdown odds falling to 26%, down from nearly 38% just weeks earlier.

The earlier spike reflected investor anxiety over political gridlock and budget delays. The recent decline suggests markets are growing more confident that Congress will reach a deal or pass a stopgap measure in time.

Crypto Markets Reacted to Shutdown Anxiety

Shutdown fears also spilled into the crypto market. At the height of the uncertainty, total crypto market capitalization dropped from $3.15 trillion to $2.95 trillion, erasing nearly $200 billion in value.

Bitcoin was hit particularly hard, falling almost 6%, from around $93,000 to below $87,500, as traders moved into risk-off mode.

U.S. spot Bitcoin ETFs added to the pressure, recording more than $600 million in net outflows over a two-week period. Concerns over delayed economic data releases and stalled policy decisions weighed heavily on investor sentiment.