US Government Shutdown Risk Reignites, Crashes Crypto Market Sentiment
Prediction markets on Polymarket now value the chances of a shutdown by January 31 at roughly 78%, a dramatic enhance from simply 10% three days earlier.
Amid rising dangers of one other US authorities shutdown, traders are flocking to safe-haven belongings amid mounting uncertainty. The Crypto Fear and Greed Index now exhibits ‘Extreme Fear’. Sentiment had recovered to impartial lower than per week in the past.
US Policymaker Deadlock Pushes Shutdown Odds on Polymarket Higher
There is mounting partisan impasse over funding for the Department of Homeland Security (DHS). The surge in chance has coincided with sharp gains in gold and silver, mirroring patterns noticed through the record 43-day shutdown that resulted in November 2025.
The House of Representatives handed a stopgap funding invoice by a vote of 341 to 81. Yet, Senate Democrats, led by Majority Leader Chuck Schumer, have refused to advance the invoice. Notably, DHS funding, significantly for Immigration and Customs Enforcement (ICE), stays hooked up.
“Democrats sought common sense reforms within the Department of Homeland Security spending invoice, however due to Republicans’ refusal to face as much as President Trump, the DHS invoice is woefully insufficient to rein within the abuses of ICE. I’ll vote no,” Schumer said in a put up.
The impasse has created a “information blackout.” Delayed economic indicators such as CPI and jobs experiences complicate the Federal Reserve’s coverage and danger fashions. This may push market volatility greater.
“The authorities will shut down in 6 days. The final time they shut down, gold and silver jumped to new all-time highs. But in case you’re holding different belongings like shares, it is advisable to be extraordinarily cautious… Because we’re heading into a complete information blackout,” wrote NoLimit, a macro analyst and common account on X.
Indeed, Polymarket bettors see an analogous end result, wagering a 76% chance that there shall be one other US authorities shutdown by January 31.
Similar bets embrace a 77% chance of a US Government funding lapse on January 31. On the off likelihood that it does occur, analysts anticipate 4 key threats:
- Delayed financial information
- Potential credit score downgrades
- Liquidity freezes, and
- A GDP contraction of roughly 0.2% per week if the deadlock persists.
“Most persons are ignoring this, however the shutdown danger is getting actual. The deadline is closing, and funding talks are caught. When the federal government slows, every part else slows with it. Paychecks get delayed, contracts cease transferring, choices get pushed. Markets all the time brush it off at first, after which all of the sudden they don’t,” added DeFi researcher Justin Wu.
Safe-Haven Metals Rally as Crypto Volatility Mounts Amid Shutdown Risk
Precious metals have been the clearest beneficiaries. Gold recorded a new all-time high above $5,000 per ounce, buying and selling for $5,041 as of this writing. Meanwhile, the silver price broke the $100 barrier for the primary time, buying and selling at $103.07 per ounce as of this writing.
Beyond safe-haven demand, structural supply constraints, industrial demand for silver in electronics and photo voltaic sectors, and broader geopolitical considerations additionally gasoline the rally.
Historical precedent reinforces this development as a result of through the prior shutdown in late 2025, gold climbed from roughly $3,858 to over $4,100 per ounce. Silver, however, examined $54, reflecting a mix of risk-off shopping for and uncertainty premiums.
Crypto markets, against this, have proven volatility amid the uncertainty. Bitcoin, which fell by roughly 20% during the 43-day 2025 shutdown, stays delicate to liquidity shocks and delayed financial information, prompting warning amongst traders.
A protracted shutdown may exacerbate stress throughout repo markets and cash funds, with a couple of bettors predicting the possible authorities shutdown lasting as much as two months.
While the danger is high, a shutdown isn’t inevitable. Congress may stop it by passing the remaining appropriations payments or extending funding through one other persevering with decision.
“…we had the longest shutdown in historical past simply a few months in the past…clearly there’s not an urge for food to do that once more,” said Rachel bade, co-host at The Huddle.
Recent bipartisan offers have lowered the chances, however with the Senate deadlocked and fewer than per week earlier than the January 30 deadline, market individuals are pricing in a major chance of disruption.
Against this backdrop, Polymarket merchants proceed to put bets, and gold and silver costs are climbing. This relies on the notion that in intervals of political gridlock and financial uncertainty, safe-haven belongings traditionally present a buffer.
However, it is usually price noting that markets can swing violently in both route relying on the decision of the standoff. Therefore, traders ought to conduct their very own analysis.
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