On February 3, President Trump signed a $1.2 trillion spending bill, ending a partial government shutdown that began on January 31 and lasted four days. The legislation will fund most federal agencies through September 30, but allocates only two weeks of funding for the Department of Homeland Security, leaving room for further negotiations on immigration policy.
At the same time, the U.S. Senate Agriculture Committee advanced its Digital Asset Market Structure bill along party lines with a 12-11 vote. This bill will need to be reconciled with another version still under review by the Senate Banking Committee before it can proceed to the full Senate for consideration.
The Government Shutdown: Background and Partisan Standoff
The partial government shutdown began on January 31 and lasted four days. The immediate cause was strong opposition from Democrats to immigration enforcement policies, particularly after federal immigration officers in Minneapolis fatally shot two U.S. citizens. This incident led to a deadlock between the two parties over funding for the Department of Homeland Security.
On January 30, the Senate passed a package of five long-term appropriations bills by a vote of 71-29, while also providing a two-week stopgap for Homeland Security to allow time for immigration enforcement negotiations. However, since the House did not reconvene until February 2, the government entered a partial shutdown over the weekend. During the shutdown, Trump used social media to pressure Republicans to unite behind the spending bill, emphasizing that "no changes can be made at this time."
Legislative Passage and Key Provisions
On February 3, the House narrowly passed the spending bill by a vote of 217-214, after which Trump signed it in the Oval Office. The bill ultimately received support from 21 Democrats.
The legislation funds the Department of Defense, Department of Education, Department of Health and Human Services, Department of Labor, Department of Transportation, and Department of Housing and Urban Development, among other federal agencies, through the remainder of the fiscal year ending September 30. Notably, funding for the Department of Homeland Security was separated from the main package and replaced with a two-week stopgap. This arrangement gives both parties and the White House additional time to negotiate immigration enforcement issues. In effect, both sides must reach an agreement on Homeland Security funding by February 13, or the agency could face another funding lapse or be forced into another short-term extension.
Parallel Progress on Crypto Market Structure Legislation
As the government shutdown crisis was resolved, digital asset market structure legislation also advanced in Congress. On January 29, the Senate Agriculture Committee passed the Digital Asset Market Structure bill by a 12-11 party-line vote.
Key provisions of the bill include establishing a registration framework for digital commodity exchanges, brokers, and dealers, along with a fast-track process for registration and temporary status with the CFTC. The fast-track process must be completed within 180 days of the bill’s enactment, with registered entities operating under temporary status until 270 days after the final rules take effect. The bill also defines "network tokens" and certain affiliated assets as digital commodities, and specifically classifies meme coins as digital commodities. Importantly, the bill maintains requirements for the SEC and CFTC to jointly draft rules addressing issues such as mixed digital asset trading, portfolio margining, and conflicts of interest.
Regulatory Coordination and Market Impact
Given the cross-agency nature of the crypto market, the SEC and CFTC are ramping up coordination. On January 29, the two agencies jointly hosted the "SEC-CFTC Coordination: U.S. Financial Leadership in the Crypto Era" event.
SEC Chair Paul Atkins stated that the "crypto initiative" will now be a joint effort between the SEC and CFTC, emphasizing that modern markets "do not divide neatly along regulatory lines." CFTC Chair Michael Selig similarly noted that crypto markets cross regulatory boundaries, and that market participants have long faced uncertainty about whether they fall under SEC, CFTC, or joint oversight. This regulatory coordination is expected to bring greater clarity to the crypto market’s regulatory framework.
Crypto Market Response and Price Analysis
With the government shutdown crisis resolved and a clearer regulatory framework emerging, the crypto market has shown a mixed response. According to Gate market data, as of February 4, 2026, Bitcoin (BTC) was priced at $75,779.1, with a 24-hour trading volume of $1.58B, a market cap of $1.56T, and a market dominance of 56.80%. The Bitcoin price changed by -3.42% over the past 24 hours, with a 24-hour high of $79,080.2 and a low of $72,930. Its all-time high is $126,080, and its all-time low is $67.81.
Ethereum (ETH) was trading at $2,250.28, with a 24-hour volume of $666.49M, a market cap of $353.69B, and a market dominance of 11.30%. The Ethereum price changed by -2.91% over the past 24 hours, with a 24-hour high of $2,355.11 and a low of $2,108.28.
Outlook and Industry Challenges
The final form of the market structure bill remains uncertain. The Senate Agriculture Committee’s text will ultimately need to be reconciled and merged with the Senate Banking Committee’s market structure framework before any comprehensive proposal can be brought to the full Senate. Meanwhile, on February 2, the White House Crypto Policy Committee met with executives and industry associations representing both crypto and traditional finance to discuss digital asset market structure legislation, including ongoing debates around stablecoin yields.
Notably, CFTC Chair Selig has directed staff to begin drafting rules clarifying when leveraged, margin, or financed retail commodity transactions in crypto assets can be offered off-exchange under the "actual delivery" exception. At the same time, the SEC is evaluating the potential impact of 24/7 equity trading.
With Trump’s signing of the spending bill, the immediate threat of a government shutdown has been averted, but deep divisions over immigration policy remain. The Department of Homeland Security has only received two weeks of funding, with a new deadline looming on February 13. Meanwhile, digital asset market structure legislation continues to advance in congressional committees, and joint efforts by the SEC and CFTC signal that the U.S. crypto regulatory framework is moving from ambiguity toward clarity. The final reconciliation of the Senate Agriculture and Banking Committee bills will shape the future of U.S. digital asset regulation. The political ripple effects sparked by the Minneapolis shooting have unexpectedly accelerated Washington’s debate over digital asset regulation. At this intersection of traditional politics and emerging technology, the U.S. is striving to strike a balance between maintaining financial stability and encouraging innovation.
