Longest Shutdown in U.S. History Brings Crypto Regulation to a Standstill

The United States has officially reopened after a record-breaking 43-day government shutdown — the longest in the nation’s history — restoring federal operations that had paralyzed the crypto industry for more than six weeks.

Agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) operated with skeleton crews, freezing ETF reviews, license approvals, enforcement actions and progress on long-awaited digital asset legislation.

The shutdown ended Wednesday after President Donald Trump signed a funding bill swiftly passed by Congress, temporarily restoring government functions until Jan. 30, 2026. Trump hinted he may work with Democrats to resolve unresolved issues, particularly healthcare funding — one of the sticking points that prolonged the shutdown.

With the government now back online, the crypto regulatory pipeline is expected to restart. The SEC is resuming its evaluation of multiple spot-crypto ETF applications, the CFTC is moving forward with the confirmation process for Trump’s nominee Mike Selig, and the Treasury will continue reviewing public feedback on the stablecoin-focused GENIUS Act.

But the reopening hasn’t brought the market revival many hoped for.

Bitcoin Fails to React as Historical Pattern Breaks

Bitcoin’s response to the shutdown’s end has been unexpectedly flat — a stark contrast to the explosive 300% rally that followed the 2019 shutdown. Instead of surging, BTC is still down roughly 12% since the start of the 2025 standoff, signaling that investor sentiment remains heavily weighed down by regulatory and macroeconomic uncertainty.

Unlike 2019, today’s environment offers little clarity. The regulatory freeze delayed the very decisions institutions were waiting for — from ETF greenlights to legislative clarity around digital assets. Meanwhile, broader financial headwinds continue to pressure Bitcoin: a strengthening U.S. dollar, rising Treasury yields and selling from long-term holders have all limited upside momentum.

Even political developments — including President Trump’s proposal to send $2,000 stimulus checks funded by tariff revenue — have failed to move markets. Legal challenges over Trump’s tariff authority have added further doubt, turning what could have been a bullish catalyst into another source of uncertainty.

Market watchers say Bitcoin may have simply missed its window to ride the equity rally that unfolded during the government shutdown, leaving it directionless as investors search for the next true catalyst.

Reopening Offers Tailwinds — But Uncertainty Still Dominates

Some analysts believe the end of the shutdown could eventually set the stage for a crypto recovery — though not immediately. Ben Lilly of JLabs Digital notes several potential tailwinds: a likely 25-basis-point Fed rate cut, a possible early end to quantitative tightening as soon as December and fresh liquidity injections through the Treasury General Account once federal operations ramp back up.

These moves could reflate risk markets, offering Bitcoin the momentum it lacked over the past six weeks. But optimism is far from universal. Coin Bureau’s Nic Puckrin warns that crypto still faces strong headwinds, arguing that the market has failed to regain confidence after October’s volatility. Persistent macro uncertainty — from inflation to monetary policy — continues to overshadow potential catalysts.

For now, the end of the shutdown restores something the crypto market desperately needed: regulatory movement. But it has not yet restored investor enthusiasm.

The U.S. government is back online, crypto rulemaking is resuming — yet Bitcoin remains stuck in neutral. Whether the reopening becomes a springboard or simply another non-event will depend on the policy and economic signals that follow in the weeks ahead.