The spike comes days after US President Donald Trump suggested that another shutdown remains likely, stating that the country could “end up in another Democrat shutdown.” The timing has reinforced market expectations that political gridlock is once again becoming a near-term risk.

Budget Standoff Clouds Regulatory Timelines

The renewed shutdown threat is not limited to fiscal politics. It also casts uncertainty over the CLARITY Act, a major crypto bill designed to bring regulatory clarity to digital assets. Previous delays to the bill were widely linked to the record 43-day US government shutdown in October and November, making the current risk particularly sensitive for the crypto industry.

Senate Tensions Intensify

Political pressure increased after Senate Majority Leader Chuck Schumer said Democrats would not support advancing an appropriations bill that includes funding for the Department of Homeland Security. The statement underscored how fragile negotiations remain, with key funding issues still unresolved.

US officials have not ruled out a shutdown scenario, adding to the sense that negotiations could break down rather than move forward quickly.

Crypto Industry Support Remains Fragile

The uncertainty has already affected sentiment around the CLARITY Act. Coinbase CEO Brian Armstrong and several industry executives have withdrawn support, arguing that the current draft could be worse than maintaining the status quo.

Galaxy Digital research head Alex Thorn has also flagged unresolved disagreements, particularly around stablecoin yield structures. According to Thorn, these issues remain one of the most divisive points, with no clear compromise yet in sight.

As Polymarket odds continue to price in a shutdown, the risk is no longer theoretical. Political deadlock now threatens to delay both fiscal decisions and crypto regulation timelines, keeping markets on edge heading into the final days of January.

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Timing is critical. The sale occurred shortly after President Donald Trump’s executive order directed that seized Bitcoin be added to the U.S. Strategic Bitcoin Reserve. This move has created both political and structural risk concerns.

Sale Conflicts With Executive Order

The U.S. Marshals Service (USMS) sold 57.55 BTC, valued at roughly $6.3 million, under DOJ instructions. These coins came from Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill as part of their plea agreements.

Senator Lummis sees the sale as a principle issue. She argues that the executive branch has ignored its own framework. Lummis commented:

“We can’t squander these strategic assets while other nations accumulate Bitcoin. This report deeply concerns me.”

She claims the action may violate Executive Order 14233, which requires Bitcoin obtained through forfeiture to be held in the Strategic Reserve rather than sold.

On-Chain Data Supports the Sale

The most revealing evidence comes from blockchain activity. According to Arkham data, on November 3, 2025, approximately $6.36 million in Bitcoin moved from Rodriguez and Hill’s addresses to the USMS wallet 3Lz5U.

The Bitcoin was then transferred to Coinbase Prime Deposit (1AaFQ), linked to Coinbase Prime. The address now shows a zero balance, indicating the assets were likely sold.

While technically a transfer, this movement is the key point in the strategic reserve debate.

White House Review Underway

The issue extends beyond Congress. Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, confirmed that the Trump administration is investigating the possible violation. This raises questions about whether the DOJ has conducted similar sales elsewhere.

Lummis warns the risk is broader. Some countries, notably China, hold seized Bitcoin rather than selling it. She argues that the U.S. risks losing strategic ground in this global race.

Why It Matters

This event shows Bitcoin still lacks a clear role in the U.S. The debate is not only legal but also about institutional consistency. Selling assets while a presidential order is active undermines the Strategic Reserve message.

Uncertainty remains. How the review unfolds will influence both Bitcoin pricing and U.S. digital asset policy in the months ahead.

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