The American bureaucratic machine has come to a standstill – the US government shutdown is now in its third week and is slowly approaching a historic record. At the same time, 16 ETFs are waiting for the green light and the cryptocurrency industry looks at the calendar with a mixture of frustration and excitement.
When Republicans and Democrats can’t agree on a budget, ordinary Americans lose access to public services. This time there is something more at play – the regulatory future of the cryptocurrency market in the United States.
Government shockdown blocks ETF avalanche
Since October 1, the US federal government has been operating in emergency mode. The US Securities and Exchange Commission (SEC), the same institution that has been a thorn in the side of the cryptocurrency industry for years, now works with a skeleton crew, i.e. a minimum staff. And this commission should issue final decisions in October regarding at least 16 cryptocurrency ETFs.
Funds tracking Solana, XRP, Litecoin and Dogecoin are in the queue. These are not unknown projects – we are talking about top altcoins with an established market position. In addition, 21 more applications were submitted in the first eight days of October alone. The industry was gearing up for the October Approval Festival. Instead, she was suspended in a vacuum. Deadlines are passing. There is no decision. The market is waiting.
Endless political stalemate
Why did the shutdown happen at all? As usual – money and politics. Republicans want to cut spending to stop the spiraling public debt, which has just exceeded a staggering $37.8 trillion. That’s about $111,000 per person for every American, from infant to retiree. At the same time, they demand greater spending on border protection.
Democrats block health care cuts and demand an extension of tax breaks that lower health insurance costs. Result? Deadlock. The Senate does not return to voting until Tuesday, and the House of Representatives is out of session. For the shutdown to end, both houses of Congress must pass budget bills or a temporary resolution maintaining funding at the current level. Only then can President Trump sign the documents and restore normality. The problem is that although Republicans control both houses, they lack the votes in the Senate to pass the budget without Democratic support.
Record not far away
This is the eleventh shutdown in US history and the first since December 2018 – January 2019, which lasted 35 days and is still the longest in history. The current one has just passed the three-week mark. It is worth adding that all federal institutions operate in limited mode during the shutdown.
To put it simply – airport workers, military personnel and officials do not receive salaries. So how does the entire country function? Thanks to social responsibility and the hope that wages will be equalized when the shutdown ends. However, if you want to apply for a visa now or handle business matters in the USA – wait for the government impasse to be broken or put on the armor of patience 😉
Altcoin season in the freezer
What about the cryptocurrency market (apart from Friday’s flash crush)? Nate Geraci, ETF analyst and president of NovaDius Wealth Management, made it clear in a Monday post on X:
Once the shutdown ends, the floodgates of spot crypto ETFs will open – a massive wave of approvals awaits us.
Bitfinex analysts predicted back in August that the approval of all proposed ETFs could trigger a new altcoin season. The logic is simple: ETFs offer exposure to cryptocurrencies with lower risk than purchasing coins directly. Lower risk means more investors – including institutional players who have so far stayed away from altcoins. Bitcoin and Ethereum already have their own spot ETFs. Now it was the turn of the rest of the field.
Cryptocurrency market crash – a healthy reset? Comment from Bitget
Ryan Lee, Chief Analyst at Bitget, says Friday’s flash crash may have a positive impact on the digital asset market:
We believe that the recent crash in the cryptocurrency market was caused primarily by increasing macroeconomic pressure, and in particular the escalation of tensions related to the trade war, which caused widespread risk aversion in global markets. This change accelerated the deleveraging process, leading to the liquidation of approximately $20 billion of positions in a single day, which compounded the sell-off in Bitcoin and Ethereum as overextended positions were liquidated.
From Bitget’s perspective, while near-term volatility may persist – potentially testing support at $100,000 for BTC and $3,600 for ETH – this is a healthy correction that eliminates poor positions and lays the groundwork for renewed accumulation. In the medium term, we expect Bitcoin to rebound to $130,000 and Ethereum to rise to $4,800, supported by sustained institutional inflows through ETFs and DATs.
Bitget’s lead analyst adds that:
This situation highlights the importance of disciplined risk management, especially in rapidly changing markets. At Bitget, we continually strive to provide investors with advanced tools and strategies that allow them to confidently navigate these fluctuations as the market evolves towards a more mature and resilient ecosystem, ready for sustainable growth.
Will patience pay off?
For the cryptocurrency industry, this is another lesson in patience in relations with American regulators. On the other hand, the longer we wait, the greater the pressure builds. When the floodgates finally open (the government shutdown ends), we may witness one of the most dynamic periods in the history of the regulated crypto market.
16 ETFs are waiting. Dozens of applications are in the queue, but the shutdown continues. When Washington finally gets back to work, altcoins may show what they can really do.
