White House Economic Advisor Kevin Hassett has hinted that the ongoing US government shutdown, which has weighed on crypto market sentiment in recent weeks, could end soon.
Summary
- White House officials say the ongoing government shutdown could end this week.
- The major cryptocurrencies continued their downward trend amid macro uncertainty.
During a appearance On CNBC’s Squawk Box, Hassett said the shutdown “will probably end sometime this week.” However, he has also warned that the lack of an agreement could prompt the Trump administration to take “stronger measures” to bring Democrats back to the negotiating table.
At the time of writing, the total cryptocurrency market capitalization had fallen by more than 3% in the past 24 hours and was hovering just above the $3.7 trillion mark. Bitcoin fell more than 3.2%, while major altcoins such as Ethereum (ETH), BNB (BNB), Solana (SOL) and XRP (XRP) posted losses between 1-5% on the day.
Much of this decline was due to investor caution as markets braced for the first release of inflation data following the US government shutdown, which was in its third week and the longest in US history.
However, with the possibility that the current shutdown will end soon, the markets are expected to recover for a number of reasons.
One of the main reasons why the crypto markets could rise after the government shutdown ends is that the US Securities and Exchange Commission, which has not been operating at full capacity, will again begin reviewing applications for spot funds traded on the crypto exchange.
The committee was expected to make a final decision on a number of altcoin ETFs before the October 1 cutoff, including Solana, XRP and Litecoin, among others. Experts believe that the chance of approval is almost 100%, especially since the SEC has adopted generic listing standards for crypto-linked commodity trusts.
Markets rallied in September on this story, and that sentiment could return once regulatory progress resumes.
Important economic data is released
The Federal Reserve is expected to hold its long-awaited policy meeting next week, where it will decide whether it plans to move forward with further rate cuts. However, the ongoing shutdown has delayed the release of crucial economic reports, giving officials limited visibility into the state of the economy.
Crypto market participants expect the Fed to cut rates, and Polymarket chances for an interest rate cut of 25 basis points, the current interest rate is 96%. Meanwhile, CME Group’s FedWatch Tool indicates there is a 98.9% chance that the US will cut rates.
Although several top Fed officials, including Jerome Powell, Michele Bowman and Christopher Waller, have expressed support for an additional rate cut during recent appearances, releasing additional economic data would provide the clarity needed to justify such a move and help the central bank assess whether inflation is declining fast enough to warrant further policy easing.
Progress on the CLARITY Act
Once the shutdown ends, it could also accelerate progress on the CLARITY Act, a landmark bill for crypto market structure that is expected to define clear legal boundaries between the SEC and the Commodity Futures Trading Commission.
Even though the legislation has been worked on continued in Congress, despite the shutdown, according to some lawmakers, passage through the Senate and eventual signing of the bill could gain momentum once normal government operations resume
The US could start financing strategic Bitcoin reserves
On October 7, crypto-friendly US Senator Cynthia Lummis said the government could start funding its Strategic Bitcoin Reserve at any time. As a result of the shutdown, attention has largely shifted to immediate budget priorities, leaving the backup plan and related legislative work in the background.
When the shutdown ends, the initiative could come back into focus as part of broader efforts to advance the Bitcoin Act and build the United States’ first national Bitcoin supply. As the world’s largest economy, if the US starts holding Bitcoin in its reserves, it is expected to further legitimize Bitcoin as a strategic asset that could in turn boost market confidence and help the crypto market recover.
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