The American political crisis threatens to shut down the government and impacts risk appetite in the crypto markets
Fears of a federal government shutdown in the United States have surged to unprecedented levels, with data from the prediction platform Polymarket indicating that the likelihood of a government shutdown in 2025 has jumped to around 82%. This political deadlock between the parties has become a significant concern in both traditional and digital financial markets.
As the deadline for budget approval approaches on October 1, negotiations remain stalled amid sharp disagreements, while President Trump's decision to cancel an important meeting has complicated the scene. According to experts, a shutdown's impact will not be limited to disrupting federal institutions but will extend to hundreds of thousands of employees who may face salary freezes, in addition to halting essential public services such as passport issuance and national park management. Moreover, the disruption of economic data releases will increase uncertainty, which could exacerbate market volatility and undermine investor confidence.
The dilemma lies in the fact that both parties are using rigidity as a political pressure tool, making it more difficult to reach a compromise.
In the cryptocurrency market, this atmosphere has clearly reflected; Bitcoin continues to swing in a wide range, while investors have turned to defensive assets like stablecoins, while meme coins and highly volatile currencies have incurred losses in the tens of percentages. Crypto-linked exchange-traded funds have also seen significant outflows, reflecting a rapid decline in risk appetite.
On another front, the regulatory framework faces additional challenges; agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have been forced to postpone or slow down their non-essential activities, including approvals for new funds or taking enforcement actions, which may hinder the progress of the digital asset market. At the same time, the rise in the dollar index has increased pressure on Bitcoin and other high-risk assets, due to a growing appetite for safe havens.
As the critical deadline approaches, the tug-of-war in Washington has become a key variable determining market direction. Major investment institutions have already begun adjusting their positions, increasing their holdings of short-term debt instruments and tangible assets in anticipation of potential disruptions. This crisis, which reveals the fragility of the American political landscape, may redraw the map of risky asset distribution on a global level in the near term.
