The US Senate has reached a three-part budget agreement to end the ongoing government shutdown, which has lasted over 40 days, marking the longest in US history. This development signals potential stability for cryptocurrency markets, which have been grappling with uncertainty.
Bitcoin (BTC) experienced a significant decline during the shutdown, dropping over 17% from its peak of $126,080 on October 6 to approximately $104,370. The extended shutdown hindered Bitcoin's recovery, as investors faced limited economic data and policy updates. Prediction markets, such as Polymarket and Kalshi, now indicate a 54% chance the shutdown will end between Tuesday and Friday this week, with Kalshi estimating a resolution after 44 days.
Institutional demand for digital assets has surged following the news, with investors resuming Ether (ETH) accumulation. Data from CryptoQuant suggests Ethereum may enter a phase of low-volatility accumulation if it stays above the $3,000 to $3,400 range. Meanwhile, altcoins like Starknet (STRK) and the Trump-backed World Liberty Financial (WLFI) token saw substantial gains, with STRK rising over 43% and WLFI up 28% in 24 hours, according to CoinMarketCap.
Analysts highlight that ending the shutdown could reduce financial uncertainty and open the door for crypto ETF approvals. Nicolai Sondergaard of Nansen noted that markets were operating in the dark during the shutdown, while ETF analyst Nate Geraci described the resolution as opening spot crypto ETF floodgates, including hopes for a spot XRP ETF under the Securities Act of 1933. At least 16 crypto ETF applications are pending, delayed by the shutdown, and their approval could drive sustained institutional inflows.
Additionally, President Trump's announcement of a $2,000 dividend for most Americans from tariff revenue added to market volatility, though the Senate deal aims to provide the stability needed for a broader crypto market rebound.
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