The longest government shutdown in American history is finally ending.
The Senate ended a 42-day deadlock on November 10, advancing a bill that now moves to the House for a likely vote on November 12. For the crypto industry, a resolution to the shutdown does more than restore government operations, it clears the way for ongoing work on regulatory frameworks that underpin market stability, innovation, and long-term growth.
In a recent interview with TheStreet, Binance CEO Richard Teng explained the US administration’s role in creating that clarity, “Given U.S. ambition and given that we have the largest ecosystem, we want to support U.S. ambition on that front,” he said. “So we are holding a watching brief of what’s coming out from the U.S. before deciding our next deployment.”
While the US government likely moves to reopen the period of legislative paralysis created a policy vacuum and stalled critical progress. The resulting uncertainty abruptly reversed market optimism, contributing to significant declines after the shutdown began on October 1. Between that date and November 12, Bitcoin fell 10.68% and Ethereum dropped 17.64%, reflecting the market-wide anxiety over Washington's policy freeze.
The Longest US Government Shutdown in History
A failure by Congress to agree on a funding deal triggered the October 1 shutdown. This eventually stretched on to become the longest in the nation's history, exceeding the previous 35-day record.
What held up the funding deal? A fight over extending healthcare subsidies for low-income Americans, a provision Democrats required and Republicans rejected. The impact spread far beyond Washington.
Roughly 1.4 million federal workers went without pay, creating immense financial hardship for these US citizens. The effects worsened over time and soon concerns grew over potential air travel chaos as essential airport personnel continued to work without compensation.
Essential services from national parks to SNAP food aid, which issued only partial benefits, were also hit. This breakdown in government function had a ripple effect, especially for new sectors like digital assets that depend on clear regulations to innovate.
US Crypto Policy Remains Stalled
As Washington ground to a halt, so did the legislative calendar for digital assets. The industry's most important piece of legislation, the Digital Asset Market Clarity Act, was left stranded.
The bill to define the roles of financial regulators had already passed the House with bipartisan support. Yet it was dead on arrival in the Senate. That halt in momentum was a sharp reversal from the progress seen just months earlier, when the GENIUS Act for stablecoins was signed into law in July. At the same time, the SEC and CFTC were forced to operate with only minimal staff, an operational freeze that halted all non-essential work.
The delays were concrete: vital rulemaking was paused, and at least 16 applications for spot crypto ETFs for assets like Solana and Litecoin were left in limbo. With agency staff forbidden from even consulting with lawmakers, informal progress was also off the table.
All of this created deep operational uncertainty for everyone in the market, from individual traders to institutional organizations that rely on clear rules to build secure products. The policy stagnation became a major driver of negative sentiment, directly feeding the market downturn.
A Shutdown Nearing its End
The Senate acted on November 10 to pass a 60-40 compromise bill and fund the government through January 30. As part of the deal, Democrats conceded on an immediate extension of healthcare subsidies in exchange for a firm guarantee of a vote on the issue by mid-December.
As the bill headed to the House for likely approval, financial markets responded with immediate relief. The simple prospect of the shutdown ending eased economic uncertainty and brought risk appetite back.
The market's reaction was fast and clear. Bitcoin jumped 4.4% to climb over $106,000, and reports began to surface of institutional investors once again accumulating assets like Ether, a tangible sign of returning confidence.
ETF analyst Nate Geraci suggested the end of the shutdown could mean the "spot crypto ETF floodgates opening." With the SEC and CFTC set to return to full capacity, work can resume on the significant backlog of applications and stalled legislation. The path for lawmakers to once again consult with agency staff on the Digital Asset Market Clarity Act is now clear.
Restarting the Clock on Crypto Regulation
The historic shutdown left a damaging void where crypto policy should have been, fueling market instability and stalling important progress. Now, the end of the standoff has triggered a positive shift in market sentiment and finally cleared the path for regulatory work to begin again.
While the logjam has been cleared, the question for the crypto industry is whether Washington can regain the momentum it lost over the last six weeks. The core conflicts between the SEC and CFTC regarding market structure and jurisdiction, after all, remain unresolved.
The hard work of crafting durable, bipartisan legislation is just beginning again. The shutdown served as a stark reminder of how closely the future of digital asset innovation in the US is tied to the functional capacity of its government and the ability of its leaders to find common ground.
No VCCircle journalist was involved in the creation/production of this content.
