State of Crypto: What Happens to Crypto if Government Shutdown Lingers

A short-term shutdown astir apt won't wounded crypto's efforts successful D.C. much. A long-lasting one? That's little clear.

Oct 4, 2025, 4:00 p.m.

The U.S. authorities unopen down this past Wednesday, furloughing immoderate national employees deemed non-essential and forcing the remainder to enactment without wage (though they should person backpay erstwhile the authorities is formally funded again). If the authorities reopens wrong the adjacent fewer weeks, it shouldn't person excessively overmuch of an effect connected D.C.'s crypto policymaking. The longer the shutdown stretches, however, the much delayed crypto efforts volition be.

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The narrative

The authorities unopen down connected Wednesday, and astatine slightest arsenic of property time, Democrats and Republicans bash not look to beryllium adjacent to a woody to reopen it.

Why it matters

As discussed in past week's newsletter, the contiguous effects of the shutdown are beauteous straightforward: Market operation authorities volition apt beryllium delayed, national agencies' rulemaking volition astir apt beryllium delayed, and caller spot crypto exchange-traded funds volition not motorboat arsenic galore hoped successful the coming days.

If the shutdown is conscionable a fewer days — oregon perchance arsenic agelong arsenic 2 weeks — these efforts should resume beauteous seamlessly. If the shutdown goes beyond that, the representation becomes overmuch muddier.

Breaking it down

The longest U.S. authorities shutdown successful past took spot betwixt December 2018 and January 2019, during President Donald Trump's archetypal term. At the time, Democrats controlled the House of Representatives portion Republicans controlled the Senate. This latest shutdown is lone a fewer days aged arsenic of property time, and could past conscionable a fewer days oregon whitethorn agelong connected further.

Perhaps the astir contiguous and tangible effect of the authorities shutdown connected crypto issues is connected exchange-traded funds. The Securities and Exchange Commission was expected to let ETFs tracking the prices of assets similar Solana SOL$224.67 and LTC$118.40 to motorboat this past week. While determination was immoderate question past week and Monday, the timepiece ran retired earlier each of the last paperwork could beryllium pushed through, and the issuers have not yet been capable to launch.

The SEC was able to finalize a brace of no-action letters anterior to the shutdown arsenic well. Other agencies, similar the IRS, were likewise able to people interim guidance anterior to the shutdown.

Ron Hammond, caput of Policy and Advocacy astatine Wintermute, told CoinDesk that, "It can't beryllium understated however engaged the crypto argumentation developments person been."

With the shutdown, policymakers are successful limbo astir these types of regulatory actions, helium said.

On the legislative front, 1 idiosyncratic acquainted with the dynamics successful Washington, D.C. said that they bash not expect the timeline for marketplace operation authorities to alteration overmuch should the shutdown extremity wrong the adjacent 2 weeks oregon so. While lawmakers are looking to clasp a imaginable markup — a proceeding wherever lawmakers statement bills earlier perchance voting to beforehand them to the afloat Senate (or House) — by Oct. 20, 2025, this seems unlikely, careless of erstwhile the shutdown ends, fixed they are inactive moving connected the substance of the bill.

Another idiosyncratic acquainted with these dynamics said an further complicating origin for lawmakers and their staffers is the information that the regulatory agencies they mightiness consult with are presently furloughed, truthful the lawmakers penning the marketplace operation measure won't beryllium capable to person feedback oregon answers to immoderate questions they mightiness person for these national regulators.

Hammond said that December "is inactive feasible" for moving authorities done Congress astatine the moment.

"The longer this shutdown drags on, the much partisan bitterness seeps into the indispensable bipartisan sermon connected important topics similar crypto marketplace structure," Hammond said. "Still, this shutdown play isn't affecting our calculus connected likelihood of marketplace operation authorities chances of passing being much probable than not earlier the 2026 predetermination ramps up."

Hammond said helium was watching to spot if a markup successful the Senate Banking and Agriculture Committees by Thanksgiving.

This week

• There are nary hearings oregon events being held by lawmakers this week astir crypto.

If you’ve got thoughts oregon questions connected what I should sermon adjacent week oregon immoderate different feedback you’d similar to share, consciousness escaped to email maine astatine nik@coindesk.com oregon find maine connected Bluesky @nikhileshde.bsky.social.

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See ya’ll adjacent week!

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