The federal government of the United States has now entered its third week of shutdown, leaving up to 16 exchange-traded funds (ETFs) pending approval if the shutdown extends into November.
The US government came to a halt on October 1 due to a lack of agreement on funding between Republicans and Democrats. This has forced agencies, including the US Securities and Exchange Commission, responsible for approving ETF applications, to operate with only essential personnel.
The cryptocurrency sector was anticipating a surge of ETF approvals in October, with the SEC expected to finalize decisions on at least 16 crypto ETFs, in addition to another 21 applications submitted in the first eight days of the month. However, the shutdown has left the situation in uncertainty, causing deadlines to lapse without any action.
No end to the US government shutdown in sight
There is no definitive timeline for a resolution to the shutdown, as both parties remain entrenched in their positions over competing priorities.
The Republicans are pushing for reductions in spending to address the escalating national debt, which exceeds $37.8 trillion, or roughly $111,000 per capita in the US, while also seeking increased funding for areas like border enforcement.
Conversely, the Democrats are against healthcare cuts and are advocating for the continuation of expiring tax credits that make health insurance more affordable, among other requests.
The Senate has no votes scheduled until Tuesday, and the House is currently out of session, leaving no immediate solutions for resolving the shutdown.
To bring the shutdown to a close, both the House of Representatives and the Senate must approve legislation that funds the government through a complete budget comprising 12 separate bills for various government sectors or a continuing resolution to temporarily maintain current funding levels while discussions continue.
Once the bills are approved, President Donald Trump can sign them into law, thereby concluding the shutdown.
The Republicans hold the reins in both chambers of Congress; however, they lack the votes in the Senate to pass spending legislation without Democratic backing.
This shutdown marks the 11th in US history and the first since the December 2018 to January 2019 shutdown, which spanned 35 days, establishing the record for the longest shutdown to date.
Altcoin season hangs in the balance
Nate Geraci, president of NovaDius Wealth Management and ETF analyst, forecasted in a recent X post that “Once the government shutdown concludes, the floodgates for spot crypto ETFs will open,” anticipating widespread approvals.
Related: US government shutdown may signal crypto market bottom: Analysts
“It’s ironic that increasing fiscal debt and standard political theatrics are holding these up. This is precisely what crypto aims to counter,” he remarked.
Analysts from Bitfinex had suggested in August that a new altcoin season could be on the horizon if all proposed ETFs secure approval, as they would provide exposure to cryptocurrencies with diminished risk, potentially drawing in more investors.
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