Crypto Markets Poised for Rebound as US Senate Moves Toward Government Reopening
The cryptocurrency market may finally catch a break as the United States Senate reportedly reaches a crucial agreement on a budget package that could effectively bring the government shutdown to an end. According to insiders cited by Politico, the proposed three-part bill appears to have the bipartisan backing necessary to clear the 60-vote hurdle in the upper chamber, signaling a likely resolution to the impasse.
Republican Senate Majority Leader John Thune has been at the center of the negotiations, with this being his fifteenth attempt to secure Democratic support for a House-approved spending proposal. If successful, the deal would conclude the longest government shutdown in U.S. history, which has now persisted for over 40 days. While a formal vote has not yet occurred, momentum is clearly building toward reopening federal operations.
The ongoing political deadlock has been weighing heavily on financial markets, particularly the volatile cryptocurrency sector. Investors have been hesitant to make bold moves amid budgetary uncertainty, with Bitcoin (BTC) experiencing a sharp retracement after an early shutdown rally. On October 6—just six days into the shutdown—Bitcoin soared to a peak of $126,080. However, it has since declined by more than 17%, falling to around $104,370, based on data from CoinGecko.
One of the sharpest drops occurred on October 10, when Bitcoin suffered double-digit losses following then-President Donald Trump’s announcement of sweeping 100% tariffs on Chinese goods. That policy move sparked widespread market instability and compounded the downward pressure on digital assets.
Historical patterns suggest that crypto could rebound significantly once political uncertainty eases. Following the last major U.S. government shutdown, which spanned from December 2018 to January 2019, Bitcoin surged from approximately $3,550 to nearly $13,000 over the next five months—a gain of more than 265%. Analysts and traders are now eyeing a similar trajectory, should the current stalemate be resolved.
Prediction markets are also signaling optimism. On Polymarket, the probability of the shutdown ending between Tuesday and Friday has jumped to 54%, up from just 27% the previous day. Competing forecasting platform Kalshi places the odds of a Friday resolution at similar levels. If these bets prove accurate, the shutdown would end after 44 days, potentially restoring investor confidence and injecting momentum back into the crypto space.
Adding another layer of economic stimulus, Trump announced Sunday that most Americans would receive a $2,000 dividend sourced from tariff revenues. Approximately 85% of the adult population, excluding high earners, would qualify. This could further boost consumer spending and speculative investment, including in digital assets like Bitcoin and Ethereum.
The broader implications of ending the shutdown extend well beyond crypto. A functioning government restores faith in economic stability, reduces risk aversion, and allows regulatory discussions — including those concerning digital assets — to move forward. Critical agencies like the SEC and CFTC, both of which oversee crypto-related compliance, have been operating under limited capacity during the shutdown. Their full return could reignite progress on long-delayed ETF approvals, stablecoin regulation, and broader crypto legislation.
Institutional investors, who often take a cautious approach during periods of political turbulence, may also re-enter the market with renewed confidence. This influx of capital could provide the momentum necessary for Bitcoin to challenge resistance levels and potentially retest previous highs.
Moreover, the resolution of fiscal uncertainty may shift attention back to macroeconomic factors that favor crypto. Persistent inflation concerns, weakening fiat currencies, and growing interest in decentralized finance (DeFi) could reignite demand for digital assets as hedges against traditional market volatility.
The potential end of the shutdown also aligns with a period of increasing interest in alternative investment vehicles. With traditional markets facing headwinds and many tech stocks underperforming, cryptocurrencies could become an attractive destination for yield-seeking investors looking to diversify.
In addition, the psychological impact of political clarity cannot be underestimated. Market sentiment often plays a crucial role in crypto volatility, and a reduction in uncertainty could create a more favorable environment for both retail and institutional participants.
Looking ahead, traders are advised to monitor not only the final vote in the Senate but also the implementation timeline of the budget package. Delays or renewed political infighting could dampen the optimism and stall any potential rally. However, if the agreement is ratified swiftly, the crypto market may be entering a window of opportunity for short- to medium-term gains.
In summary, the Senate’s progress toward ending the shutdown could serve as a pivotal moment for the cryptocurrency market. As legislative clarity returns and macroeconomic indicators remain supportive, digital assets may be well-positioned for a strong rebound.