U.S. Government Shutdown 2025 Begins: What Triggered It and What It Means for Crypto Markets

The United States entered its first federal government shutdown in nearly seven years at 12:01 a.m. EDT on October 1, 2025, after lawmakers failed to approve funding for Fiscal Year 2026. According to , the shutdown was triggered as federal funding expired at the deadline with no appropriations passed.

Republicans put forward a short-term stopgap bill to keep the government open until November 21. Democrats blocked it, insisting on restoring healthcare subsidies and rolling back Medicaid cuts. the measure failed in the Senate, leaving Congress deadlocked as the deadline passed.

Meanwhile, crypto markets are once again drawing investor attention with Bitcoin holding above $114K, up 1.6% in the past week.

shows BTC hovering between $112K and $114K in the past 24 hours with a nearly 6% decline in trading volume.

The outcome will temporarily sideline up to 750,000 federal employees, stall agencies, and deepen partisan divides as investors wonder how Bitcoin will respond in the face of fiscal instability.

The FAA would furlough 11,000 employees, though air traffic controllers and TSA staff continue without pay. Agencies have been instructed to prepare detailed covering essential and non-essential services.

As news of the US government shutdown spread, Bitcoin extended a two-day rally, climbing from around $108,650 to nearly $114,000. Analysts pointed to a bullish double-bottom pattern forming on the charts, a technical signal that often precedes major rallies.

Hedge assets like gold and silver also rose, but crypto markets stole the spotlight thanks to their strong correlation with investor anxiety over US governance.

According to data, the odds of a shutdown had surged to 85% before the deadline, suggesting traders were already positioning themselves defensively in Bitcoin.

The flight-to-safety narrative has gained traction over the past few years, as crypto increasingly becomes a hedge against political dysfunction and macro instability.

In every year since 2015 when Bitcoin closed September in green, Q4 returns more than 53%. October, in particular, has been the strongest month, with average gains of 21.8%.

If that pattern holds, Bitcoin could be positioned for a powerful run in the coming weeks with a year-end .

Bitcoin network economist Timothy Peterson recently noted that 60% of Bitcoin’s annual performance tends to occur after October 3, with rallies often extending into midyear.

He projected a 50% probability that BTC could hit $200,000 by mid-2026, citing recurring seasonal cycles and post-halving inflows.