A significant number of US federal employees have been furloughed, while others remain on duty without pay, following lawmakers’ failure to enact a temporary funding measure last week, with the shutdown anticipated to persist.
As of Monday morning, no agreements have been reported between Republican and Democratic representatives in the US Congress to halt the shutdown and restore normal operations, affecting crucial entities like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
The Senate is set to vote on a continuing resolution to fund the government at 5:30 pm ET, though it remains uncertain if the proposal will garner enough support to pass at the time of this publication.
The core of the Democrats’ stance in the budget deadlock revolves around healthcare, with lawmakers insisting that any appropriations bill include a reversal of cuts enacted in a July budget proposal.
In terms of the ramifications for the digital asset sector, the SEC indicated it would function “under modified conditions” with an “extremely limited number of staff” until a funding bill is approved, impacting its capacity to process crypto exchange-traded fund applications. The CFTC, led by an acting chair and with only one commissioner, is similarly operating under limitations with minimal staffing.
“The US government shutdown […] poses risks to the crypto industry by disrupting the SEC and CFTC, both essential to the global digital asset market,” Przemysław Kral, CEO of crypto exchange Zondacrypto, stated in a communication shared with Cointelegraph.
“While the immediate effects might appear limited, their diminished operational capacity threatens to stall innovation and undermine investor confidence, especially in a region already behind in crypto regulation,” Kral noted.
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Until normal government operations resume, it is improbable that the Senate will deliberate on a bill to establish a digital asset market framework, nor will US President Donald Trump put forth nominations for new CFTC commissioners.
The White House retracted the nomination of Brian Quintenz as CFTC chair last week amid reported objections from Gemini co-founders Cameron and Tyler Winklevoss, both of whom are Trump supporters and donors.
Crypto users are wagering on a prolonged shutdown
Various bets on platforms like Kalshi and Polymarket indicate that many users foresee a lengthy — though not historically unprecedented — shutdown. Trump previously held the record for a 35-day government shutdown during his first term over his efforts to construct a US-Mexico border wall.
On Kalshi, a bet regarding the duration of the shutdown predicted a 69% likelihood of it extending beyond 15 days, with a 41% chance for more than 25 days. Polymarket offered users a 24% probability that the current shutdown would become the longest in US history, but a 72% likelihood that it would conclude after October 15.
The shutdown has now entered its sixth day following the lapse in funding at midnight on September 30.
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