Author: Chloe, ChainCatcher
The US government shutdown is nearing its end. This 40-day budget impasse finally saw a turning point on the evening of November 9th: the US Senate reached a preliminary temporary funding agreement by a vote of 60 to 40, extending government funding until January 30th of next year. Government operations are expected to resume in the near future. Trump told reporters, "The shutdown looks like it's almost over."
According to CNN, multiple Senate sources confirmed that Senate leaders have reached a bipartisan temporary agreement to end this longest government shutdown crisis in history.
The shutdown is currently only "temporarily" suspended; the approval process will take several more days. This is the longest shutdown in U.S. government history, beginning on October 1st at the start of the fiscal year. The shutdown was caused by Republicans and Democrats failing to reach a consensus on the new fiscal year budget, particularly regarding the extension of the healthcare tax credit and the Trump administration's push for federal employee layoffs and spending cuts. According to the newly reached agreement, the Senate will schedule a vote in December on new amendments to the Affordable Care Act, commonly known as Obamacare. Sources indicate that the Democratic caucus has enough votes to support the agreement, which is expected to pass the bill and pave the way for reopening the government. The agreement also includes rescinding Trump's previous layoff orders against some federal employees and adding provisions to prevent similar actions from happening again. In addition, the agreement will ensure that the food stamps program receives extended funding until fiscal year 2026 to avoid further impact on low-income families. However, Reuters also points out that the Senate-amended agreement still needs House approval, and after passing the vote, it must be sent to Trump for signature as legislation; currently, it can only be described as a "temporary" suspension of the shutdown. The overall situation is similar to 2018; will the end of the shutdown mean a rebound in Bitcoin? According to ABC News, the Congressional Budget Office estimates that the 2018-2019 shutdown caused $11 billion in losses, and this shutdown, being longer, will undoubtedly have a deeper impact. The Treasury's General Account (TGA) has ballooned to $1 trillion, absorbing approximately $700 billion in liquidity from the market, leading to a cash shortage in banks and record usage of the Federal Reserve's Standing Repurchase Facility (SRF). The cryptocurrency market has been particularly hard hit, with Bitcoin prices falling to around $102,600, a drop of over 10% in two weeks and 18% from its all-time high in early October. A recent report from the BitMEX exchange's analyst team points out that this shutdown accelerated the decline of the Bitcoin bull market, with the core mechanism being the abnormal expansion of the U.S. Treasury's General Account (TGA). During the shutdown, federal agencies suspended non-essential spending, but tax revenue and debt issuance continued, causing the TGA balance to surge from its previous low to $1 trillion. This is equivalent to government agencies siphoning approximately $700 billion in liquidity from the private financial system. Funds that could have been used for bank lending, money market fund investments, or risk asset allocation are now locked in government accounts and completely illiquid. As a result, the banking system's cash shortage has worsened, and the Federal Reserve's Standing Repurchase Facility (SRF) usage has reached a record high, indicating that financial institutions are struggling with short-term liquidity. This liquidity crunch has not only reduced Bitcoin's trading depth but also prompted investors to accelerate profit-taking: OG holders have recently sold off some of their positions, further amplifying the correction. A review of the US government shutdown and Bitcoin prices reveals that the 35-day shutdown in 2018-2019 (the longest at the time) coincided with the tail end of a crypto bear market. Bitcoin fell from approximately $4,014 to a low of $3,600, a drop of about 6-10%, reflecting a widespread sell-off of risk assets during periods of economic uncertainty. After the shutdown ended and the government reopened in early 2019, Bitcoin rose for seven consecutive days, embarking on a five-month surge with a nearly 300% increase, rebounding from its low to over $5,000. This rebound was not only due to a recovery in market sentiment but also benefited from subsequent liquidity injections and a rebound in global risk appetite. The current shutdown in 2025, exceeding the record by 40 days, is more closely resembling the situation in 2018. Analyst Ash Crypto points out, "After the last US government reopened, Bitcoin experienced a five-month rally, surging over 300%." Former analyst Arthur Hayes adds that this correction is purely due to a macro liquidity crisis, and Bitcoin's four-year cycle is far from over; the halving effect and ETF inflows will continue to drive long-term upward movement. However, the current market environment is vastly different. Institutional funds from Bitcoin ETFs, global monetary policy divergences, and the uncertainty surrounding the Trump administration may all contribute to a different trajectory for this rebound than in the past. History can be referenced, but it cannot be completely replicated. Trump's easy pressure on Democrats has exacerbated internal party divisions. Currently, the Democratic Party is increasingly divided. Centrists, senators nearing retirement, or those facing re-election challenges are key to this compromise, allowing the Democrats to end the government shutdown. However, this has further fueled anger among the left-wing grassroots, who see it as a missed opportunity to counter Republican government cuts and Trump's authoritarianism. Virginia Senator Mark Warner objected, arguing that the agreement only forced Republicans to concede a small step. He claimed Trump's hardline strategy worked; he continued his international travels and golfing, refusing to negotiate and only offering a last-minute promise of a December vote, successfully forcing Democrats to compromise. The BBC warned that this fully demonstrates the effectiveness of "delay tactics" when Republicans hold a majority in the Senate, but it also leaves healthcare for tens of millions of people unresolved. A shutdown is likely to become the norm for the US government, with the risk of a shutdown increasing significantly over the next five years. Without congressional reform, the economy and people's livelihoods will continue to be used as political bargaining chips.
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