US Gov’t Shutdown Deal Sparks Hope For Crypto Market Relief

A Washington deal is giving fresh life to global markets, and crypto traders are cautiously optimistic after weeks of turmoil. Relief is sweeping through digital assets, stocks, and futures amid the recent move to end the US government shutdown.

Senate Moves To End Shutdown

The US Senate has reportedly advanced a funding measure that will keep the government running until January 30, 2026, while reinstating some federal employees affected by the shutdown.

After 40 days of a partial government shutdown that caused problems with food aid, air travel, and public services, US senators and the White House have finally reached a deal to reopen the government, likely bringing an end to one of the longest shutdowns in recent years.

The measure would prohibit federal agencies from ending the job contracts of employees until January 30, a welcome move for federal worker unions and their allies. It would stall US President Donald Trump’s campaign to trim down the federal workforce.

The debate in Congress came as Trump again called on Sunday to replace subsidies for the Affordable Care Act’s health insurance marketplaces with direct payments to individuals. Those subsidies, which helped boost ACA enrollment to 24 million since 2021, are a key reason behind the shutdown. Republicans say they’re willing to talk about the issue, but only after government funding is back in place.

Relief For Crypto

The markets reacted soon after. Bitcoin had tumbled below the $100,000 mark for the first time earlier this week but is now back above $106,000. Ethereum surged around 6% while XRP gained about 8%. Yet the measure still needs final approval from the House and the president’s signature before taking effect.

According to CoinGecko data, Bitcoin first surged to a new all-time high of $126,080 six days into the government shutdown on October 6. But that rally was short-lived. The world’s largest cryptocurrency has since plunged more than 17% to trade around $105,000 as of Monday.

Its most drastic slide occurred on October 10, when prices plummeted by double digits following an announcement that the US had levied 100% tariffs on China; a move that rattled investors and triggered heavy selling across both traditional and digital markets.

Reports have revealed that the Senate’s action brought a wave of optimism to markets hungry for clarity. Crypto futures trading volumes rose and funding rates flipped positive as traders bet on a short-term rebound.

But analysts warned such rallies often dissipate quickly. Many described the market reaction as “relief buying” rather than any shift in long-term fundamentals. Restoring economic data releases — including labor reports and federal spending figures — could help recalibrate expectations for Federal Reserve rate decisions, which remain a major driver for cryptocurrencies.

Market watchers are now focused on two things: the final passage of the shutdown bill and whether the upcoming US economic data will confirm the signs of cooling inflation. If both events align, then risk assets, including Bitcoin, might have a more stable recovery.

The deal talk has provided a temporary respite after weeks of uncertainty. Yet the market’s recent swings show just how fragile confidence remains in the face of politics, tariffs and global tension.

Featured image from Radu Florin on Unsplash, chart from TradingView