The threat of an impending U.S. government shutdown is looming again as the Oct. 1 deadline nears. Shutdown speculations have riled up markets across the board, from stocks to cryptos. Market participants point to a possible ripple effect in crypto, especially on Bitcoin (BTC) and Ethereum (ETH), as funding standoffs create uncertainty.
Analysts Flag Risks During Shutdown Buzz
Analyst Hunt argues that political dysfunction often sets the stage for volatility across risk assets, and crypto is no exception. He stresses that a funding lapse risked a “data blackout” at the Federal Reserve, leaving policymakers without fresh inflation or employment data.
🚨 US Govt Shutdown & the Impact on stocks and crypto like $BTC, $ETH & alts
The U.S. government runs out of funding on Oct 1 if Congress doesn’t pass a budget deal.
Odds of a shutdown are already near 67% and history shows the S&P 500 often weakens a week before such a… pic.twitter.com/FioVHw9RcF
— Hunt (@Hunt029) September 28, 2025
Furthermore, Hunt said traders leaned defensive when the Fed lacked visibility, dragging Bitcoin and Ethereum into broader risk-off positioning. He also pointed to regulators, noting that a shutdown slowed the SEC and CFTC, freezing reviews of spot ETF filings that shaped sentiment around both tokens.
Independent market Ted reinforced the caution with history. He recalled how Bitcoin fell about 12% during the 2018–2019 shutdown, when markets faced the most extended federal standoff in US history.
The analyst argued that the current pump in Bitcoin and Ethereum masked fragility, citing weakening ETF inflows and fading futures demand. The warning carried weight, since shutdowns usually delivered selling pressure first, with rebounds coming only after political resolution.
Traders on X added their own positioning. Bullrunner77 said shutdown buzz almost always unsettled crypto near month-end, prompting him to hedge short on Bitcoin and take profits on Ethereum.
Still, he flagged that a double bottom in the ETH USD chart could later drive a rally toward $5,000. X-based trader Tyler Wilson agreed that a shutdown would trigger a hard dip. However, the trader framed it as a buying window once fear peaked.
These views relate to the mechanics already weighing on markets. Shutdowns have injected volatility, stalled regulatory oversight, and muddied monetary expectations. According to Polymarket, the odds of the US government shutting down have reached 85% at the time of writing, which could exacerbate the panic infused in the markets.
Charts Show Bitcoin and Ethereum Weather Shutdown Turbulence
The analysts’ warnings found support in past trading patterns. Bitcoin and Ethereum showed that shutdown episodes often delivered immediate volatility, with dips marking the first reaction. The BTC USD chart highlighted how the Jan. 2018 standoff coincided with a near 68% slide before the token stabilized.
ETHUSD showed a similar move, with Ethereum dropping sharply before recovering as broader markets adjusted. These examples reinforced that shutdown risk rarely passed without shaking crypto prices first.
Longer time frames, however, revealed a different story. Despite near-term weakness, Bitcoin and Ethereum staged recoveries once shutdown fears eased or political deals materialized. After the 2013 shutdown, Bitcoin advanced rapidly, rallying over 815% as macro narratives shifted. Similarly, after the US government shutdown scares in Sept. 2021 and 2023, the prime crypto painted impressive gains. The pattern suggested market participants returned in droves once macro sentiment stabilized.
Following the 2019 standoff, Ethereum rebounded alongside the broader risk complex.
These rebounds underscored that shutdown volatility often fit within broader cycles, shaping short-term noise but not derailing longer-term trajectories.
Disclaimer: The analysis reflects the author’s personal views and is for informational purposes only. It is not financial advice. Readers must do their own research or consult a licensed adviser. Losses will not be the responsibility of the author or CoinChapter. The author may hold Bitcoin, Ethereum, or other cryptocurrencies.What is happening with SUI Network Read here to know more.
