Crypto News Today: Ether Slides Toward $4K, Bitcoin and XRP Drop as U.S. Shutdown Risks Rise

Key Takeaways:Ether (ETH) dropped over 3% to nearly $4,000, leading crypto losses in Asia.Bitcoin (BTC) slipped below $112,000, while XRP, SOL, and DOGE fell between 2–3%.Polymarket traders now price a 77% chance of a U.S. government shutdown by year-end, with a 63% chance by Oct. 1.The White House is preparing for large-scale job cuts if Congress fails to pass a funding bill.Cryptocurrencies fell on Thursday as traders reacted to rising odds of a U.S. government shutdown and cautious signals from the Federal Reserve.Ether (ETH) led the drop, falling more than 3% to $4,037, nearly testing the $4,000 mark for the first time since early August. Bitcoin (BTC) slipped over 1% to $111,839, while XRP, Solana (SOL), and Dogecoin (DOGE) each shed 2–3%. SOL was on track to break below the key $200 level.The CoinDesk 20 Index was down 2% at 3,940 points, while U.S. stock futures traded flat to slightly positive.Shutdown Odds SurgePrediction market Polymarket showed a sharp rise in shutdown probabilities, with “Yes” contracts pricing a 77% chance of a U.S. government shutdown by Dec. 31 — the highest since the market opened in January. Odds of a shutdown by Oct. 1 stood at 63%.The White House Office of Management and Budget instructed agencies to prepare for furloughs and staff cuts if Congress cannot pass a spending measure before the end of September. Lawmakers must either approve a continuing resolution or pass all 12 annual funding bills, which is unlikely before the deadline.Fed Uncertainty Adds PressureMarkets also weighed comments from San Francisco Fed President Mary Daly, who reiterated support for further interest rate cuts but declined to provide a timeline.The Fed cut rates by 25 basis points on Sept. 17 and signaled the possibility of two more cuts this year. However, Chair Jerome Powell and other policymakers have emphasized a data-dependent approach, keeping traders cautious.Seven Fed officials, including New York Fed President John Williams, are scheduled to speak on Thursday, with markets awaiting Friday’s PCE inflation data — the Fed’s preferred measure of inflation.According to QCP Capital, if inflation pressures remain contained, “markets may interpret this as room for further Fed cuts, providing liquidity tailwinds into Q4. That could be the catalyst for BTC to attempt a long-anticipated breakout.”