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- The US government reopened after a 43-day shutdown, and Raoul Pal expects a major liquidity surge that could shape global markets.
- Fed officials remain divided on a December rate cut, and uncertainty pushed Bitcoin and other cryptocurrencies sharply lower.
The United States government reopened after President Donald Trump signed the long-awaited funding bill, ending the 43-day shutdown that began on October 1. Markets immediately shifted focus to the economic implications of the reopening, with analysts assessing the next phase for risk assets, including cryptocurrencies.
Market strategist Raoul Pal expects a rapid shift in financial conditions following the end of the shutdown. He argued in an X update that a surge in liquidity could begin within days, powered by heavy spending from the Treasury General Account.
According to him, the liquidity expansion may stretch over several months as the government replenishes agency budgets and accelerates delayed payments.
Pal also believes the dollar could weaken as the balance sheet expands. He pointed to the upcoming year-end funding squeeze as a key moment, predicting policymakers will likely introduce temporary measures such as term funding to stabilize markets.
Moreover, he anticipates renewed momentum behind the Clarity for Crypto Act, arguing that lawmakers now have the political space to push for regulatory certainty in digital assets.
He extended his analysis to global policy trends, indicating that China may continue expanding its balance sheet while Europe leans on new fiscal support. Pal referred to the combined effect of these moves as a “liquidity flood” that could shape global markets well into 2026.
Fed Officials Split on December Rate Decision
Federal Reserve policymakers remain far from agreement on the December rate decision. Governor Stephen Miran signaled support for a 50-basis-point cut, warning that a pause could be shortsighted. However, San Francisco Fed President Mary Daly adopted a more cautious approach.
After previously backing cuts, she now says her position is undecided. Minneapolis Fed President Neel Kashkari also remains uncertain as he monitors conflicting economic data.
Uncertainty around monetary policy, combined with the reopening, did not lift crypto prices. Bitcoin dropped below $100,000, falling to $96,919 and marking its lowest level since May. The token has now slipped more than 23% from its recent all-time high above $126,000.
Ethereum plunged over 9%, while Solana, XRP, and Dogecoin also saw heavy declines.
Analysts cite fading institutional flows and reduced expectations for a December rate cut as factors behind the downturn. Markets now look ahead to the Federal Open Market Committee meeting on December 10, where the rate-cut vote will take place.
SEC and CFTC Resume Full Activity
The shutdown halted large portions of the SEC and CFTC’s operations. Both agencies recalled staff on Thursday as their contingency plans required workers to return the day after Congress restored funding. During the shutdown, the SEC could conduct only limited reviews of ETFs and IPOs, leaving several digital-asset applications in limbo.
The CFTC paused most enforcement and market oversight functions, including rulemaking efforts.
Regulated firms rushed to file applications before the government reopened, anticipating a backlog once regulators resumed operations. Acting CFTC Chair Caroline Pham confirmed on X that employees are now back at work and enforcement pipelines are being restored.
