Another political drama is about to unfold. The US government faces a funding deadline at midnight on January 30, with Republicans and Democrats deadlocked over healthcare subsidies, and the risk of a government shutdown reemerging. According to Polymarket data, the probability of a government shutdown during the holiday period has soared to 38%. What impact could this have on the crypto market?

**How dire is the situation?**

In fact, the US just recovered from a record 43-day government shutdown last year, only to face a new crisis in the blink of an eye. Both parties in Congress have been at odds since before Christmas, and most government departments can only operate on temporary funding until the end of January. Very few departments have secured full fiscal year budgets.

The Democrats plan to leverage the January 31 deadline to push for the continuation of Obamacare subsidies; the Trump administration outright opposes, claiming this is Democrats playing tricks. Neither side is willing to back down, and the possibility of a shutdown cannot be underestimated.

**How will the crypto market respond?**

Historically, government shutdowns tend to trigger chain reactions. During periods of liquidity crunch, BTC often faces pressure due to risk asset sell-offs, but as the shutdown ends and liquidity returns, a rebound usually follows. If a shutdown occurs this time, the same script is likely to repeat.

A more direct threat comes from policy delays. Market structure reform bills and new crypto ETF approvals, which are currently underway, will all be stalled during the shutdown. This not only postpones short-term policy benefits but also reduces overall market risk appetite.

Delayed economic data releases will also heighten market uncertainty. Investors won’t have timely access to key indicators like employment and inflation, and this information vacuum often amplifies panic sentiment.

**Can historical experience be referenced?**

Generally, the US government tends to reach a temporary agreement at the last minute, kicking the can to the next session. But this time, healthcare subsidies have become a deadlock between the two parties, with neither willing to compromise. The likelihood of a full shutdown is higher than ever.

The crypto community needs to closely monitor political developments. Short-term market volatility may intensify — this is both a risk and an opportunity. The key is how to respond to uncertainty, rather than blindly following any particular direction.

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