Rewrite the 18-year script, US government shutdown ends = Bitcoin price will soar?

Written by: Chloe, ChainCatcher

The U.S. government shutdown is about to come to an end, as a 40-day budget deadlock finally saw a breakthrough on the evening of November 9: The U.S. Senate reached a preliminary temporary funding agreement with a vote of 60 to 40, extending government funding until January 30 of next year. It is expected that government operations will restart in the short term, and Trump told reporters, “It seems the government shutdown is about to end.”

According to CNN, multiple Senate sources have confirmed that Senate leaders have reached a bipartisan temporary agreement to end the longest government shutdown crisis in history.

Currently, it is only a “temporary” suspension, and the agreement still needs a few days for the process to be completed.

This is the longest shutdown in the history of the U.S. government, which began on October 1, the start of the fiscal year, due to the inability of Republicans and Democrats to reach a consensus on the budget for the new fiscal year, particularly concerning the extension of the health tax credit and the federal employee layoffs and spending cuts promoted by the Trump administration.

According to the latest consensus agreement, the Senate will schedule a vote in December on a new amendment to the Affordable Care Act, commonly known as Obamacare. Sources reveal that the Democratic caucus has enough votes to support this agreement, which is expected to facilitate the passage of the bill and pave the way for the government to reopen. The agreement also includes the revocation of Trump's previous order to dismiss certain federal employees and adds provisions to prevent similar actions from occurring again.

In addition, the agreement will ensure that the food stamps program receives extended funding through the fiscal year 2026 to avoid further impacts on low-income families.

However, Reuters also pointed out that the agreement modified and passed by the Senate still needs approval from the House of Representatives. After the vote passes, it must be sent to Trump for legislative signing. For now, it can only be said to be a “temporary” suspension.

The overall situation is similar to 2018, the halt is over = will Bitcoin rebound from the low?

According to a report by ABC, the U.S. Congressional Budget Office estimated a loss of $11 billion due to the 2018-2019 shutdown, and this time the shutdown is longer, with an even deeper impact. The Treasury General Account (TGA) has ballooned to $1 trillion, siphoning off about $700 billion in liquidity from the market, leading to a cash shortage for banks and a record usage rate of the Federal Reserve's Standing Repo Facility (SRF).

The cryptocurrency market can be described as a disaster area, with the price of Bitcoin dropping to around $102,600, falling over 10% in two weeks and down 18% from its historical high at the beginning of October. The analyst team from BitMEX stated in their latest report that this stall has accelerated the decline trajectory of the Bitcoin bull market, with the core mechanism being the abnormal expansion of the U.S. Treasury General Account (TGA).

During the shutdown, federal agencies suspended non-essential spending, but tax revenues and debt issuance continued, causing the TGA balance to soar from its original low to $1 trillion, equivalent to approximately $700 billion in liquidity being siphoned out of the private financial system by government agencies. Funds that could have been used for bank lending, money market fund investments, or risk asset allocations are now locked in government accounts and completely non-circulating, resulting in an exacerbated cash shortage in the banking system. The usage rate of the Federal Reserve's Standing Repo Facility (SRF) has hit an all-time high, indicating that financial institutions are struggling for short-term funding turnover. This liquidity drought has not only depressed the trading depth of Bitcoin but also prompted investors to accelerate profit-taking: OG holders have recently sold off some positions, further amplifying the correction.

Looking back at the U.S. government shutdown and Bitcoin prices, it can be observed that the 35-day shutdown from 2018 to 2019 (the longest record at the time) coincided with the end of the crypto bear market, during which Bitcoin fell from around $4014 to a low of $3600, a decline of about 6-10%. This reflects a general sell-off of risk assets during economic uncertainty. After the shutdown ended and the government reopened in early 2019, Bitcoin rose for seven consecutive days, kicking off a five-month surge with an increase of nearly 300%, rebounding from the low to over $5000.

The recent rebound is not only a repair of market sentiment but also benefited from subsequent liquidity injections and a recovery in global risk appetite. This time, the 2025 shutdown has exceeded a record 40 days, and the overall situation is closer to that of 2018. Analyst Ash Crypto pointed out: “After the last reopening of the U.S. government, Bitcoin launched a five-month rally, soaring over 300%.” Former Arthur Hayes also added that this correction is purely caused by 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 significantly different. Factors such as the institutional funds brought by the Bitcoin ETF, the divergence in global monetary policies, and the uncertainty of the Trump administration may cause this rebound trajectory to differ from the past. History can be referenced, but it cannot be fully replicated.

Trump easily pressured the Democrats to make concessions, leading to an exacerbation of internal party divisions.

Currently, the split within the Democratic Party is intensifying, and moderate senators, those who are about to retire or facing dire election circumstances, are the key votes for this compromise, allowing the Democrats to take action to end the painful government shutdown. However, this has further sparked anger among the leftist grassroots, who see it as a missed opportunity to confront the Republican plans to cut government and Trump’s authoritarianism.

Virginia Senator Mark Warner opposed, stating that the agreement merely allowed the Republicans to take a small step. Trump's hardline strategy worked; he continued to visit various countries and play golf, refusing to negotiate throughout the process, only giving a commitment for a vote in December at the last moment, successfully forcing the Democrats to concede.

The BBC warned that this completely proves the effectiveness of the “hardline tactic” under the Republican advantage in the Senate, but it also leaves millions of people's healthcare in limbo. The shutdown is bound to become a regular mode of operation for the U.S. government, with the risk of shutdown significantly rising over the next five years. If Congress does not reform, the economy and people's livelihoods will continue to be used as political bargaining chips.