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What Happens to Crypto if Government Shutdown Lingers
NFT Gaming

What Happens to Crypto if Government Shutdown Lingers

by admin October 4, 2025



The U.S. government shut down this past Wednesday, furloughing any federal employees deemed non-essential and forcing the rest to work without pay (though they should receive backpay when the government is formally funded again). If the government reopens within the next few weeks, it shouldn’t have too much of an effect on D.C.’s crypto policymaking. The longer the shutdown stretches, however, the more delayed crypto efforts will be.

You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions.

The narrative

The government shut down on Wednesday, and at least as of press time, Democrats and Republicans do not appear to be close to a deal to reopen it.

Why it matters

As discussed in last week’s newsletter, the immediate effects of the shutdown are pretty straightforward: Market structure legislation will likely be delayed, federal agencies’ rulemaking will probably be delayed, and new spot crypto exchange-traded funds will not launch as many hoped in the coming days.

If the shutdown is just a few days — or potentially as long as two weeks — these efforts should resume pretty seamlessly. If the shutdown goes beyond that, the picture becomes much muddier.

Breaking it down

The longest U.S. government shutdown in history took place between December 2018 and January 2019, during President Donald Trump’s first term. At the time, Democrats controlled the House of Representatives while Republicans controlled the Senate. This latest shutdown is only a few days old as of press time, and could last just a few days or may stretch on further.

Perhaps the most immediate and tangible effect of the government shutdown on crypto issues is on exchange-traded funds. The Securities and Exchange Commission was expected to allow ETFs tracking the prices of assets like Solana SOL$225.07 and LTC$118.36 to launch this past week. While there was some movement last week and Monday, the clock ran out before all of the final paperwork could be pushed through, and the issuers have not yet been able to launch.

The SEC was able to finalize a pair of no-action letters prior to the shutdown as well. Other agencies, like the IRS, were similarly able to publish interim guidance prior to the shutdown.

Ron Hammond, head of Policy and Advocacy at Wintermute, told CoinDesk that, “It can’t be understated how busy the crypto policy developments have been.”

With the shutdown, policymakers are in limbo around these types of regulatory actions, he said.

On the legislative front, one individual familiar with the dynamics in Washington, D.C. said that they do not expect the timeline for market structure legislation to change much should the shutdown end within the next two weeks or so. While lawmakers are looking to hold a possible markup — a hearing where lawmakers debate bills before potentially voting to advance them to the full Senate (or House) — by Oct. 20, 2025, this seems unlikely, regardless of when the shutdown ends, given they are still working on the text of the bill.

Another individual familiar with these dynamics said an additional complicating factor for lawmakers and their staffers is the fact that the regulatory agencies they might consult with are currently furloughed, so the lawmakers writing the market structure bill won’t be able to receive feedback or answers to any questions they might have for these federal regulators.

Hammond said that December “is still feasible” for moving legislation through Congress at the moment.

“The longer this shutdown drags on, the more partisan bitterness seeps into the necessary bipartisan discourse on important topics like crypto market structure,” Hammond said. “Still, this shutdown drama isn’t affecting our calculus on odds of market structure legislation chances of passing being more probable than not before the 2026 election ramps up.”

Hammond said he was watching to see if a markup in the Senate Banking and Agriculture Committees by Thanksgiving.

This week

  • There are no hearings or events being held by lawmakers this week around crypto.

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Bluesky @nikhileshde.bsky.social.

You can also join the group conversation on Telegram.

See ya’ll next week!



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October 4, 2025 0 comments
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Crypto ETFs
GameFi Guides

Is The Approval Of Crypto ETFs At Risk? SEC Operations Frozen By Gov. Shutdown

by admin October 3, 2025


Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

The US government shutdown has significantly slowed operations across various federal agencies, including the Securities and Exchange Commission (SEC), which was expected to begin the approval process for long-awaited spot crypto ETFs.

For the fourth consecutive time, spending proposals intended to reopen the government have been rejected by lawmakers from both parties, pushing the shutdown into next week. 

Spot Crypto ETFs On Hold

As reported by Crypto In America, during a government shutdown, while the SEC retains the ability to act on urgent matters such as fraud and market emergencies, much of its routine work is halted. 

This includes delays in processing initial public offerings (IPOs), exchange-traded funds (ETFs), and other filings, as well as pausing rulemaking efforts. 

With spot crypto ETFs requiring formal approval from the SEC’s Division of Corporation Finance before they can commence trading, product launches for assets like Litecoin (LTC), Solana (SOL), and XRP are now likely on hold until government funding is restored.

However, altcoin prices saw a significant recovery on Friday, with LTC, SOL and XRP surging by 17%, 16% and 9% respectively over the past seven days. This aligns with the broader crypto market recovery, led by Bitcoin (BTC)’s surge to near record highs.

New Generic Listing Standards

“It’s like a rain delay,” Bloomberg ETF expert Eric Balchunas told Crypto In America,  highlighting the frustration felt by the industry as they await clarity on the SEC’s operations. An SEC spokesperson also confirmed that the shutdown has hindered their ability to respond to press inquiries.

The current challenges follows the SEC’s decision for crypto ETF issuers to withdraw their 19b-4 filings. This, on the heels of the approval of generic listing standards that obviate the need for individual filings; as a result, crypto ETFs could potentially go effective on a rolling basis once the shutdown concludes. 

The daily chart shows the total crypto market cap valuation near record highs. Source: TOTAL on TradingView.com

Featured image from DALL-E, chart from TradingView.com 

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.



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October 3, 2025 0 comments
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Government Shutdown Delays Sec Decision On Canary Litecoin Etf
Crypto Trends

Government Shutdown Delays SEC Decision on Canary Litecoin ETF

by admin October 3, 2025



The U.S. Securities and Exchange Commission (SEC) missed its October 2 deadline to decide on Canary Capital’s proposed spot Litecoin (LTC) exchange-traded fund (ETF), leaving investors and the crypto market uncertain. The agency has not issued any public comment explaining the delay.

Earlier this year, the SEC asked firms to withdraw their 19b-4 filings, which had been used for exchange rule changes, in favor of S-1 registration statements for ETF approval. Canary withdrew its 19b-4 application on September 25, following the SEC’s instructions. 

FOX News reporter Eleanor Terrett noted, “Since the generic listing standard went into effect and the agency asked issuers and partner exchanges to withdraw their 19b-4s, I’m told the deadlines technically no longer matter.”

Analysts say this regulatory shift makes the old 19b-4 deadlines less relevant, but it adds uncertainty to the approval process for crypto ETFs, which are already under increased scrutiny.

Government shutdown complicates approval

The SEC outlined in August that during a federal government shutdown, it would “not review and approve applications for registration.” 

This includes new financial products, self-regulatory organization rule changes, and accelerated registration statements. While the SEC continues to operate with limited staff, this has slowed the review of new ETF applications, including Canary’s Litecoin proposal.

Litecoin market update

Litecoin is currently trading at $116.51, down 2.41% in the last 24 hours. It is ranked #19 by market capitalization, which stands at $8.89 billion, up 2.25% for the day. Its 24-hour trading volume is $1.15 billion, down 13.47%, as per CoinMarketCap data.

Broader crypto ETF landscape

Canary’s ETF is just one of several altcoin funds being reviewed in the U.S., with proposals for Solana, XRP, Avalanche, Cardano, Chainlink, and Dogecoin also in the works. Meanwhile, Bitcoin and Ethereum spot ETFs have already drawn over $74 billion, showing that institutional investors remain heavily interested in crypto.

Top asset managers like Fidelity, Franklin Templeton, and Bitwise have submitted updated S-1 filings for spot Solana ETFs, some featuring staking options. Analysts expect the SEC could give approval to some of these ETFs by mid-October.

The SEC’s delay highlights the challenges of crypto regulation in the U.S., where procedural changes and limited staffing during a government shutdown leave issuers and investors waiting for clarity.

Also Read: 21Shares SUI and Polkadot ETFs Near SEC Approval After DTCC Listing



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October 3, 2025 0 comments
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Government Workers Say Their Out-of-Office Replies Were Forcibly Changed to Blame Democrats for Shutdown
Product Reviews

Government Workers Say Their Out-of-Office Replies Were Forcibly Changed to Blame Democrats for Shutdown

by admin October 3, 2025


On Wednesday, the first day of the US government shutdown, employees at the Department of Education (DOE) set their automatic out-of-office email responses to inform recipients that they would be unable to respond until after the shutdown. Hours later, many DOE employees realized their response message had been altered to contain partisan language without their consent. The automatic reply now blamed Senate Democrats for the entire shutdown.

It’s not clear who made the change to email accounts, which was first posted about on Bluesky by journalist Marisa Kabas. “It’s disturbing,” says a DOE employee who asked to remain anonymous because they were not authorized to speak to the press. Some employees changed their responses back to the more neutral language, only to have it changed yet again to the partisan response, multiple sources tell WIRED.

As government employees began to log off in preparation for a shutdown, many agencies sent out guidance, including suggested language for their out-of-office message. While some agencies offered employees neutral language, simply explaining they would not be able to reply until the shutdown concluded, employees at the Small Business Administration and, according to sources and screenshots reviewed by WIRED, the Department of Labor, received suggested language that blamed Democrats for the shutdown.

At the DOE, human resources sent employees standard language ahead of the shutdown, and many employees used this as their OOO text. Originally, the suggested language given to DOE employees read, “Thank you for your email. There is a temporary shutdown of the US government due to a lapse in appropriations. I will respond to your message as soon as possible after the temporary shutdown ends. Please visit Ed.gov for the latest information on the Department’s operational status.” Many employees set this neutral language as their OOO status.

The new, changed message reads:

“Thank you for contacting me. On September 19, 2025, the House of Representatives passed HR 5371, a clean continuing resolution. Unfortunately, Democrat Senators are blocking passage of HR 5371 in the Senate which has led to a lapse in appropriations. Due to the lapse in appropriations I am currently in furlough status. I will respond to emails once government functions resume.”



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October 3, 2025 0 comments
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Crypto Trends

What the Government Shutdown Means for Pending Crypto ETFs

by admin October 2, 2025



In brief

  • SEC decisions on applications for spot altcoin ETFs are on hold during the government closure.
  • Analysts have been expecting the agency to approve Solana funds early this month.
  • The regulator is weighing more than 90 applications for funds tracking different cryptos, combinations of tokens and digital asset strategies.

Investors expecting U.S. Securities and Exchange Commission approvals for a range of exchange-traded funds tracking various altcoins will have to wait longer, as the partial government shutdown lingers.

The regulator said that it would “not review and approve applications” for products or provide other “non-emergency support to registrants” during the closure, as outlined in a contingency operations plan highlighted on its website.

The SEC is currently reviewing more than 90 applications for ETFs based on the spot price of various altcoins, combinations of tokens, and different digital asset strategies, with Bloomberg fund analysts predicting that likely approvals, beginning with Solana-focused products, will be announced in early October.

“Crypto ETF approval season has officially arrived!” quipped Bloomberg Senior ETF analyst Eric Balchunas in a Tuesday post.

Issuers from the traditional finance and digital asset worlds have also proposed funds based on XRP, Cardano, Litecoin, and Dogecoin, among others.

Now, the October timeline seems increasingly unlikely as Senate Republicans and Democrats try to resolve a budget impasse.



As of late Wednesday, both sides were entrenched with budget proposals from each failing to muster enough votes to override a filibuster.

In the interim, government agencies have had to scale back their everyday activities. The SEC noted that it would have limited personnel “until further notice.”

In a Twitter post on Wednesday, Nate Geraci, co-founder of trade group the ETF Institute, wrote that the “shutdown would definitely impact the launch of new spot crypto ETFs.”

“ETF Cryptober might be on hold for a bit,” he added.

Looks like a prolonged government shutdown would definitely impact the launch of new spot crypto ETFs…

ETF Cryptober might be on hold for a bit.

From SEC’s “Operations Plan Under a Lapse in Appropriations & Government Shutdown”… pic.twitter.com/Z6gY1bJbUt

— Nate Geraci (@NateGeraci) October 1, 2025

The raft of filings over the past 18 months comes as issuers from both traditional finance and crypto look to address surging demand for digital asset-focused products, following the dramatic success of spot Bitcoin and Ethereum funds.

The 11 BTC funds now manage about $150 billion in assets (AUM), according to data analytics platform CoinGlass with BlackRock’s iShares Bitcoin Trust, the fastest growing ETF in the industry’s 32-year history, accounting for more than half the total. Ethereum funds’ AUM now surpasses $22 billion.

Solana, the sixth-largest crypto with a market capitalization of more than $118 billion, was recently trading above $222, up more than 6% amid a wider upswing in crypto prices on Wednesday, as investors seemed largely untroubled by the budget impasse or looked to crypto as a safe-haven asset.

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October 2, 2025 0 comments
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Bitcoin buoys altcoin rally amid U.S. shutdown jitters
Crypto Trends

Bitcoin buoys altcoin rally amid U.S. shutdown jitters

by admin October 2, 2025



Bitcoin pushes past $117,000 as altcoins rally, yet a palpable caution lingers. The gains feel fragile, with traders’ eyes locked not on charts but on a paralyzed Capitol Hill, knowing political chaos could trump technical momentum.

Summary

  • Bitcoin climbs above $117K as a 4% market rally lifts altcoins like Solana, XRP, and Dogecoin.
  • Gains come as the U.S. government shuts down, fueling volatility and caution among traders.
  • Analysts warn the fiscal deadlock may heighten short-term risks, though long-term market impact could be limited.

The U.S. government entered a shutdown early Wednesday after a deadlocked Congress, embroiled in a partisan fight over healthcare subsidies, failed to pass a funding bill by the midnight deadline.

In the first hours of the fiscal standoff, Bitcoin solidified a rebound from its $109,000 support level, climbing more than 3.5% to reclaim the $117,000 mark, according to the crypto.news price page. This momentum acted as a rising tide, lifting the broader crypto market by 4% to a $4 trillion valuation.

Smaller cryptos like Solana (SOL), XRP, and Dogecoin (DOGE) capitalized on the move, surging over 5% and leading a robust altcoin rally that appears to have overshadowed the political gridlock.

Analysts warn of volatility as shutdown collides with Powell’s dovish shift

Market analysts remain divided on how much weight the U.S. government shutdown will carry for crypto, but they agree that it complicates an already delicate backdrop. The intersection of Washington’s fiscal paralysis and dovish hints from Federal Reserve Chair Jerome Powell is shaping into a tug-of-war that investors cannot ignore.

A Bitunix said in a statement obtained by crypto.news the political deadlock is injecting fresh volatility into an environment already adjusting to shifting monetary expectations. The analyst explained that a prolonged shutdown could delay crucial economic data, suppress consumer and investment activity, and ultimately amplify concerns about a growth slowdown.

Paradoxically, this weakness could strengthen the case for the very monetary loosening that initially fueled the crypto rally. For assets like Bitcoin and the broader crypto market, this means being pulled between two narratives: one where easy money is on the horizon, and another where economic anxiety triggers a flight to safety.

“The government shutdown represents a short-term political risk and does not alter the medium-term easing trend, but it does amplify market volatility. The current environment is caught in a tug-of-war between ‘rate cut expectations’ and ‘growth concerns,’ keeping investor sentiment cautious. For BTC, watch supports at 110k–112k and 106k–108k, with resistance at 116k and 122k–125k. Flexibility is key, and traders should closely monitor liquidation hotspots,” the analyst said.

Analysts call for measured calm

The Bitunix analyst’s sentiment of measured calm is echoed in the institutional sphere. Johnny Garcia, managing director of Institutional Growth and Capital Markets at VeChain, offers a longer-term perspective, stating in a note that government shutdowns are not without precedent and historically suggest little lasting effect on markets.

While the stakes on the table may give some a ‘this time is different’ hunch,” Garcia stated, “generally speaking a solution is eventually found.” The MD expressed confidence that the shutdown itself is “probably more noise than material for long-term market impact,” a view supported by the relatively muted reaction in traditional equity and bond markets at the onset.

Meanwhile, this is not uncharted territory for the United States. This marks the eleventh federal government shutdown in the past four decades, a recurring drama of partisan brinkmanship. The longest closure, a 35-day ordeal in late 2018, serves as a stark reminder of how protracted these disputes can become.



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October 2, 2025 0 comments
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Federal Workers Are Being Told to Blame Democrats for the Shutdown
Product Reviews

Federal Workers Are Being Told to Blame Democrats for the Shutdown

by admin October 1, 2025


At the Department of Housing and Urban Development, employees were instructed to set an out-of-office message that reads, “The federal government’s spending authority expired at 11:59 on Tuesday, September 30, 2025, therefore, most HUD programs have been temporarily interrupted, and most HUD employees have been told they cannot work…We regret any inconvenience the government lapse of appropriations may cause.”

On the agency’s website however, a pop-up window announces, “The Radical Left in Congress shut down the government. HUD will use available resources to help Americans in need.” The same language appears on a red banner at the top of the website, as well as in a pop-up with the same banner in the agency’s internal system for employees, hud@work.

“You can’t click anything without these annoying pop-ups. Every single click to get to a time card or HRConnect,” says a HUD employee who asked to remain anonymous because they aren’t authorized to speak to the press. “It’s fucking nuts.”

HUD did not respond to a request for comment.

The website for the Department of Justice (DOJ) also includes a banner stating, “Democrats have shut down the government. Department of Justice websites are not currently regularly updated.”

The DOJ did not respond to a request for comment.

In the lead up to the shutdown, employees across government received emails from agency leaders containing similar sentiments to those in the SBA email. An email from HUD’s deputy secretary Andrew Hughes on the evening of September 30 included the subject line, “Far Left Gov Shutdown Imminent” and included instructions for HUD employees during the shutdown. An email received by employees at the Department of the Interior (DOI), with a signature from Secretary Doug Burgum, read, “President Trump opposes a government shutdown, and strongly supports the enactment of HR 5371, which is a clean Continuing Resolution to fund the government through November 21, and already passed the US House of Representatives. Unfortunately, Democrats are blocking this Continuing Resolution in the US Senate due to unrelated policy demands.”

A nearly identical email was sent out to employees at the Small Business Administration (SBA) from the email associated with the Chief Human Capital Officer (CHCO).

“The tone of the language is very antagonistic and partisan in a way we don’t expect from formal messaging from agency leaders,” says Moynihan. “If you had a federal employee who emailed their colleagues blaming president Trump for the shut down, they’d be pursued for a Hatch Act violation and probably fired in the meantime.”

In a memo posted on X that appeared to be sent to the heads of executive departments and agencies, Russell Vought, the head of the Office of Management and Budget (OMB), alleged that the government was shutting down due to “insane policy demands” from Democrats.

Leah Feiger contributed reporting.



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October 1, 2025 0 comments
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What Shutdown? Bitcoin Bulls Head Toward $118,000
Crypto Trends

What Shutdown? Bitcoin Bulls Head Toward $118,000

by admin October 1, 2025



Key points:

  • Bitcoin is trying to break $118,000 for the first time since mid-August.

  • US labor market weakness drives crypto and risk assets higher despite the US government shutdown.

  • Any dips are “buy opportunities,” BTC price analysis says.

Bitcoin (BTC) sought six-week highs after Wednesday’s Wall Street open as markets shrugged off the US government shutdown.

BTC/USD four-hour chart. Source: Cointelegraph/TradingView

Bitcoin starts October with range breakout attempt

Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD reached $117,713 following weak US jobs data.

The pair came within $150 of beating its September maximum — doing so would lead it to its highest levels since Aug. 17.

“Bitcoin is trying to breakout from its Monthly Range already on the first day of the new month of October,” popular trader and analyst Rekt Capital summarized in his latest commentary on X.

BTC/USD one-month chart. Source: Rekt Capital/X

US private-sector employment numbers came in significantly below expectations, turning negative when estimates had projected a gain of 45,000 jobs for September.

Labor market weakness is considered a tailwind for crypto as it heightens the odds of interest-rate cuts and thus increased capital inflows.

The latest data from CME Group’s FedWatch Tool showed that markets were overwhelmingly betting on the Federal Reserve cutting rates by 0.25% at its October meeting.

Fed target rate probabilities for October FOMC meeting (screenshot). Source: CME Group

Continuing, fellow trader Jelle described BTC price action as “pushing through the resistance like it isn’t even there.”

“One last thing to ‘worry’ about: a sweep of the September highs. Clear those, and the bears will have very little leg to stand on. Higher,” he told X followers.

BTC/USD chart. Source: Jelle/X

Others focused on potential support retests, with trading account Daan Crypto Trades flagging $112,000 as “key short-term support.”

“Ideally don’t want to see price re-visit that,” he wrote alongside a chart showing a channel that price was attempting to break through. 

“Up to the bulls to take it from here, a proper breakout & some daily closes above the channel would signal this is ready for a move to new highs to me.”BTC/USD one-day chart. Source: Daan Crypto Trades/X

The new US government shutdown, meanwhile, failed to impact the buoyant mood across risk assets.

Related: BTC price due for $108K ping pong: 5 things to know in Bitcoin this week

Both the S&P 500 and Nasdaq Composite Index opened modestly higher, while gold consolidated after hitting its latest new all-time highs earlier in the day.

Commenting, trading company QCP Capital stated that the shutdown should be of little importance.

“On fiscal theatre, a U.S. government shutdown should be a market non-event beyond data delays and headline noise,” it argued in its latest “Asia Color” research post. 

“Essential services continue, back-pay limits income effects, and past episodes have not derailed risk assets.”BTC/USD vs. S&P 500 one-day chart. Source: Cointelegraph/TradingView

QCP noted that during the 2018 shutdown, the S&P 500 ended 10% higher.

“Given BTC’s elevated beta to equities, we see shutdown-related dips as buy opportunities rather than chasing gap-ups,” it concluded.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.



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October 1, 2025 0 comments
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Can the government shutdown have a significant effect on the crypto space?
GameFi Guides

Can the government shutdown have a significant effect on the crypto space?

by admin October 1, 2025



The U.S. government is facing a shutdown due to the inability of Republicans and Democrats to agree on the budget. Various sources evaluate the probability of a shutdown as high. If it happens, a shutdown may have multiple repercussions. Among other implications, it could bring more uncertainty to the crypto market and slow the pace of crypto regulation.

Summary

  • U.S. President Donald Trump and Vice President JD Vance warn about a highly probable shutdown starting on Oct. 1.
  • In the event of a shutdown, the government stops publishing employment and inflation data, making it harder for traders to time the market. Experts predict market volatility.
  • The Clarity Act passage will be delayed, while the SEC will halt working on rulemaking for the crypto sector and won’t be able to review applications for spot crypto ETFs.

Probability of shutdown

Uncompromising disagreement on healthcare spending between the GOP and Democrats delayed budget finalization. On Sept. 29, Vice President JD Vance said that the government is “headed for a shutdown.” Earlier, President Donald Trump warned that Americans would likely “end up with a closed country for a period of time.” JD Vance accused Democrats, saying:

“You don’t put a gun to the American people’s head and say, unless you do exactly what Senate and House Democrats want you to do, we are going to shut down your government. I think we are headed to a shutdown because the Democrats won’t do the right thing.”

The Democratic Senate minority leader, Chuck Schumer, is mirroring Vance’s claims, stating that “it’s up to Republicans whether they want to shut down or not.”

Government funding expires in hours and where are House Republicans?

They canceled votes and went on vacation.

Republicans own this shutdown.

— Democrats (@TheDemocrats) September 30, 2025

This rigidness of both parties left little space for possible agreement. As of Sep. 30, 89% of voters on Polymarket believed the U.S. government would go through a shutdown before the year-end.

Government funding expires in hours and where are House Republicans?

They canceled votes and went on vacation.

Republicans own this shutdown.

— Democrats (@TheDemocrats) September 30, 2025

Possible implications for the economy 

Shutdowns furlough public workers, put government contractors at risk, and block state agencies from doing their jobs. Given that the U.S. is already going through a shaky period, a shutdown may bring more harm than usual.

The harm level depends on the economy’s health at the time of the shutdown and the shutdown’s length. The latest shutdown, which took place during Trump’s first presidential tenure in December 2018 and January 2019, was the longest one. It lasted 35 days and saw the biggest consumer sentiment decline. 

The drop in consumer sentiment indicates that people are not comfortable spending their money on nonessential goods, which generally undermines economic growth and hinders business conditions.

What’s at stake for the crypto community?

Government shutdowns don’t usually affect the markets that much. However, it has an indirect impact, and the crypto space may take a soft hit. TV personality and author Jim Cramer said to CNBC, addressing the possible market impact of a shutdown:

“I’m not worried about most of this stuff. My biggest fear is that a shutdown will delay important pieces of economic data, making life more difficult for the Federal Reserve and potentially postponing their plans to cut interest rates.”

There are several ways the looming shutdown may impact the crypto space:

  • It will hinder data collection for investors.
  • It will stop the government from passing the much-anticipated CLARITY Act.
  • It will block the SEC’s work on rulemaking in the crypto space and approval of spot crypto ETFs.

Traders will not have key metrics from the Federal Reserve, such as inflation and unemployment rates, available. They will have to trade without factoring this data in.

Government funding expires in hours and where are House Republicans?

They canceled votes and went on vacation.

Republicans own this shutdown.

— Democrats (@TheDemocrats) September 30, 2025

The CLARITY Act, the market structure bill aimed at setting clear rules for various types of cryptocurrencies, was set to be signed into law before Thanksgiving. The possibility of a shutdown brings uncertainty about whether the act will be passed that soon or even this year.

Finally, a shutdown will hinder the work of the Securities and Exchange Commission, slowing the realization of Project Crypto. Recently, SEC Chair Paul Atkins outlined the main directions of the agency aimed at regulating the crypto space and facilitating innovation in the U.S.

He talked about the upcoming innovation exemption that will let crypto businesses launch freely without being “torpedoed” by bureaucratic burdens. On top of that, Atkins said the SEC is going to do a lot of work related to rulemaking in the crypto space. Evidently, if a shutdown takes place, this work gets delayed. The same goes for reviewing and approving crypto spot ETFs, which usually galvanize trading when they get approved.

The latest shutdown implications

The latest shutdown took place in 2018-2019 due to disagreement between Democrats and Republicans over funding for the wall on the southern border. It was the longest and one of the most destructive. It affected 800,000 public workers. Half of them were furloughed, while others continued to work without pay. The 2018-2019 shutdown saw consumer sentiment declining by 7 points.

As for crypto, Bitcoin’s price was crumbling ahead of the shutdown in November, going from $6,400 to $3,200 in a single month. However, when the shutdown started, the price rebounded to more than $4,000. When the shutdown ended, Bitcoin’s price was above $3,500.

In general, it is safe to say that the biggest decline took place weeks before the shutdown itself. This September, the last two weeks were harsh for the crypto market. Soon, we will learn if this was a repetition of the past shutdown’s price action.





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October 1, 2025 0 comments
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Rally Stalls Amid Looming U.S. Government Shutdown
Crypto Trends

Rally Stalls Amid Looming U.S. Government Shutdown

by admin September 30, 2025



The bounce in crypto markets mostly stalled on Tuesday with the U.S. government on track to shut down at midnight Eastern time.

Bitcoin BTC$114,477.21 — after earlier having slid about 2% from overnight highs near $115,000 – managed a late afternoon rally to $114,300, up marginally from 24 hours ago. Ether ETH$4,170.25 traded just above $4,100, sliding 1.3% during the same period.

Most tokens in the broad-market benchmark CoinDesk 20 Index posted declines, with AVAX$30.05, Uniswap UNI$7.6933 and NEAR$2.6247 leading losses.

A check on traditional markets showed gold climbing another 0.5% to $3,850, extending its record-breaking run, while the Nasdaq and S&P 500 equity indexes also saw late rallies to move into positive territory just minutes ahead of the close.

Most market participants are in wait-and-see mode as the U.S. government seems headed toward a certain shutdown of uncertain length.

When the government shuts down, all non-essential activities under the executive branch will halt, which will likely include any of the Securities and Exchange Commission, Commodity Futures Trading Commission and federal bank regulators’ ongoing efforts to create new rules for the crypto industry.

While the shutdown won’t have an effect on people’s ability to file comments for open rulemaking efforts, it’s unlikely anyone at these agencies will be tasked to read the feedback. This halt may also affect ongoing efforts by companies to list and trade exchange-traded funds tied to cryptocurrencies like solana SOL$209.52 and LTC$106.99, CoinDesk reported earlier Tuesday.

Congress’ work on crypto market structure legislation will be delayed. The Senate Banking Committee already postponed a tentatively planned markup — a hearing to debate provisions on the bill — on its market structure draft from Tuesday to later in October. The Senate Agriculture Committee has not published any draft legislation. The Senate Finance Committee, however, still intends to hold a hearing on Wednesday to examine crypto tax issues.

Shutdown leaves BTC fragile, Bitfinex warns

A shutdown would also halt the release of key economic indicators such as jobs data and CPI inflation reports that could amplify volatility across asset classes, including cryptos, Bitfinex analysts warned in a report.

Data delays could complicate the Federal Reserve’s monetary policy decisions with ripple effects echoing across rates markets, the report noted. Global investors have already been cutting U.S. exposure, a trend which a protracted shutdown could accelerate, the report said.

“For markets, the immediate risk is confidence erosion and data blind spots, rather than systemic financial instability,” Bitfinex analysts said about the potential shutdown.

Zooming out, BTC is still in a corrective phase since the Fed’s interest rate cut in September, which turned out to be a “buy the rumor, sell the news event,” Bitfinex analysts said.

The report noted that unlike previous cycles, this one has unfolded in three distinct multi-month surges, each capped by widespread profit-taking.

Bitcoin realized profit shows three distinct peaks through this market cycle. (Bitfinex/Glassnode)

“At every cyclical peak, more than 90 percent of coins moved were transacted in profit, a clear signal of widespread distribution,” the analysts wrote.

Having just stepped back from the third such peak, Bitfinex analysts see probabilities tilting toward further consolidation.

“Deep political polarisation, rising fiscal deficits and a fragile global economy leave markets more sensitive to shocks,” they added.



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September 30, 2025 0 comments
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