First U.S Shutdown Since 2018

For the first time since the 35-day closure in late 2018, the U.S. government has entered a shutdown. The deadlock stems from Congress’ inability to pass the funding bill for the 2026 fiscal year, highlighting sharp partisan divisions between Democrats and Republicans.

At the heart of the dispute lies a temporary funding measure known as the continuing resolution (CR). Republicans pushed the measure forward without additional policy adjustments demanded by Democrats. Senate Majority Leader Chuck Schumer insisted on permanently extending tax credits under the Affordable Care Act, warning that millions could otherwise lose health coverage.

Bitcoin and Gold See Safe-Haven Demand

As the political standoff deepens, investors are seeking safety in alternative assets. Bitcoin gained more than 3% in the past 24 hours, trading around $117,227, while gold prices climbed by 0.7%. The moves suggest increasing demand from institutional and retail players looking to hedge against prolonged uncertainty.

Have Altcoins Already Bottomed Out?

Ryan Lee, chief analyst at Bitget, argued that both Bitcoin and the S&P 500 could benefit from the shutdown scenario. He noted that prolonged budget deadlocks tend to keep U.S. interest rates lower, a factor that often supports risk assets.

According to Lee, Bitcoin’s independence from government and political events makes it particularly attractive to traditional investors:

“Bitcoin stands to benefit from this environment. While short-term corrections are likely, many leading altcoins appear to have already reached their bottom.”

Lee also highlighted that Bitcoin reclaiming the $116,000 level is a strong signal heading into October, historically considered one of the most positive months for crypto markets.

Mixed Market Reactions in the Past

History shows that markets don’t always respond uniformly to government shutdowns. In 2013, stocks fell while Bitcoin rallied. By contrast, the 2019 shutdown saw both equities and Bitcoin decline simultaneously.

As one macro research outlet noted, shutdowns disrupt government operations but their impact on markets varies significantly each time.

Federal Reserve and Investor Outlook

Past shutdowns have often nudged the Federal Reserve toward more dovish monetary policies. On average, the S&P 500 delivered a 13% yearly gain in the aftermath of such events, according to trading data. Some analysts even argue that markets historically “welcome” shutdowns due to the resulting policy flexibility.

Meanwhile, prediction market platform Polymarket currently places the probability of the shutdown ending by October 15 at around 38%.

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Political Standoff Over Funding

Although Republicans hold a majority in both chambers of Congress, they still need Democratic support to pass a short-term funding measure that would keep the government operating. Democrats are pushing for the reversal of healthcare spending cuts included in the July budget agreement, creating another sticking point in negotiations.

Former President Donald Trump recently voiced skepticism, suggesting talks with Democratic leaders would be “unproductive.” Still, bipartisan leadership discussions are scheduled at the White House, bringing together figures such as Minority Leader Hakeem Jeffries, Senate Minority Leader Chuck Schumer, House Speaker Mike Johnson, and Senate Majority Leader John Thune.

Regulatory Progress at Risk

If a shutdown occurs, the effects won’t be limited to legislative votes—it would also impact federal agencies like the SEC and CFTC. This raises the likelihood of further delays for the Senate Banking Committee’s review of the crypto market structure bill, a proposal designed to bring clarity to oversight of digital assets.

Senator Cynthia Lummis of Wyoming had originally aimed for committee approval by the end of September. That timeline has already slipped into late October, and a potential shutdown would likely push progress even further down the road.

Historical Context: Lessons From the Past

Government shutdowns have become a recurring feature of U.S. politics since the 1980s. The longest on record lasted 35 days during 2018–2019, when a dispute over funding for Trump’s border wall halted federal operations.

Should another shutdown occur now, lawmakers’ immediate focus will inevitably shift to restoring government funding. As a result, regulatory issues like digital asset legislation may once again be deprioritized.

What It Means for the Crypto Industry

The pending bill builds upon the House-passed CLARITY Act and seeks to clearly define the roles of the SEC and CFTC in overseeing cryptocurrencies. Market participants have been awaiting this framework as a potential milestone for U.S. digital asset regulation.

However, if political deadlock leads to a shutdown, the path forward could remain uncertain. For now, the crypto industry may need to brace for yet another delay, with legislative priorities overshadowed by budget disputes in Washington.

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As of March 8, XRP is facing technical and fundamental pressures, suggesting a potential 20% price drop in the near future. Based on recent market analyses and historical patterns, investors should pay attention to three key signals.

XRP’s Symmetrical Triangle: 20% Downside Risk

XRP/USD is currently forming a symmetrical triangle on its weekly chart, a pattern reflecting a tug-of-war between buyers and sellers. Symmetrical triangles are not always bullish continuation patterns; they typically resolve with a breakout in either direction based on prevailing momentum.

Historically, such setups have often led to declines; for example, Ethereum’s triangle breakdown in 2018 resulted in an 80% drop. If a breakout occurs, the price could move toward the maximum height of the triangle. For XRP, this would bring the downside target to around $1.46, which aligns with the 50-week exponential moving average.

Trump Supports Bitcoin, Excludes XRP

XRP’s price dropped following the White House’s Crypto Summit on March 7, as expectations of its inclusion in the U.S. strategic crypto reserve faded. President Trump’s team clarified that cryptocurrencies like Ethereum, Solana, Cardano, and XRP were only examples, not official selections. There is no evidence that the U.S. government holds XRP, and Trump’s broader altcoin strategy excludes new purchases. This announcement led to a 10% decline in XRP. Meanwhile, Bitcoin is favored by the Trump administration, with the U.S. holding approximately $17.7 billion in BTC.

XRP’s Price Drop Risk: Technical and Fundamental Factors

XRP is consolidating in a historical distribution zone, and the XRP/BTC pair remains above the 200-2W EMA at around 2,459 satoshis. A break below the 200-2W EMA could pull XRP/BTC towards the 50-2W EMA at 1,700 satoshis, increasing the risk of a 20% drop in XRP/USD.

XRP’s trading volume mirrors the 2021 bear market. XRP is currently in a distribution phase, with large investors offloading positions to retail buyers. This surge in volume follows a 600% rise from November 2024 to January 2025, marking a typical distribution setup. A similar volume explosion in 2021 preceded a prolonged downtrend. If history repeats, XRP may face another major correction.

The decline in XRP whale holdings further reinforces the distribution. Whale sales signal a lack of confidence in short-term performance, and these sales can reduce liquidity, pushing smaller investors to sell as well and increasing selling pressure.

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