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- Analysts like Bloomberg’s James Seyffart noted that the shutdown could add further delays to crypto ETF approval, despite the SEC introducing generic listing standards.
- Despite the shutdown, Bitcoin has surged past $116,500, as markets anticipate a dovish Federal Reserve, and a 25 bps rate cut this month.
The US government under the Trump administration has announced a shutdown as the Republicans and Democrats fail to reach a consensus on the funding bill. The shutdown comes with the start of Q4, while the crypto community awaits the approval of several crypto ETFs for altcoins like Solana (SOL), XRP, Litecoin (LTC), etc.
US Government Shutdown Can Impact Crypto ETFs
The US federal government has officially entered a partial shutdown after Congress failed to reach a funding agreement. On Tuesday, the Senate rejected two separate bills aimed at averting the shutdown. The Republican-backed proposal fell short with a 55–45 vote, while the Democratic bill was defeated 53–47. Both measures failed to meet the 60-vote threshold required for passage.
Earlier this week, Bloomberg analyst James Seyffart weighed in on the potential approval of pending crypto ETFs, most of which have an SEC ruling deadlne in October. Top asset managers like Vanguard are already working to provide Crypto ETF exposure to their institutional clients, as reported by CNF.
However, Seyffart believes that the ongoing US government shutdown could complicate the process. In a post on X, Seyffart noted that the shutdown adds uncertainty to the SEC’s timeline for reviewing and approving these funds. This is despite the fact that SEC’s approval of generic listing standards will remove the lengthy 19b-4 requirements.
His colleague, Eric Balchunas, also acknowledged that the launch schedule for the ETFs remains unclear, with more details expected from the SEC soon.
Seyffart further pointed out that the pending ETF applications, filed under generic listing standards, have had their prospectuses in place for an extended period. The government shutdown could add delays to approvals that were already overdue.
What’s Next for the Crypto Market
Following the US government shutdown, market analysts like Ted Pilows highlighted the impact of the shutdown on investors, noting that several key economic reports will be postponed. The jobs report scheduled for October 3, the trade balance on October 7, and critical inflation indicators, including the Consumer Price Index (CPI) on October 15 and the Producer Price Index (PPI) on October 16, are likely to be all be delayed.
Despite the shutdown, financial markets are showing strong gains. Bitcoin has climbed above the $116,500 level, gold reached a new all-time high, and the NASDAQ is up, asper the CNF report. Ted Pillows believes that amid the US shutdown, the market appears to be pricing in a more dovish stance from the Federal Reserve.
Investors are increasingly anticipating interest rate cuts this month. Polymarket traders assign an 85% probability of a 25 basis-point cut, while CME’s FedWatch tool shows nearly a 95% likelihood. Lower rates are expected to increase the appeal of risk assets, including cryptocurrencies, boosting investor sentiment amid the shutdown
