Ether (ETH $3,958) led losses across major cryptocurrencies Thursday during Asian trading, as the probability of a U.S. government shutdown climbed to record levels.
On the decentralized prediction platform Polymarket, “Yes” shares for the contract “U.S. government shutdown in 2025?” surged to 77%, the highest since the contract’s January launch. Traders are effectively pricing a 77% chance of a shutdown by Dec. 31, while the odds of a shutdown by Oct. 1 are 63%.
Reports indicate the White House is preparing for large-scale furloughs and staff cuts if Congress fails to pass a funding measure. On Wednesday, the Office of Management and Budget instructed federal agencies to draft contingency plans should spending legislation not be approved next week.
The government is projected to run out of funds by the end of September. To prevent a shutdown, Congress must either pass a short-term continuing resolution or finalize the 12 full-year appropriations bills, which typically require bipartisan support to reach the 60-vote threshold.
Cryptocurrencies Under Pressure
- Ether declined over 3%, testing the $4,000 level for the first time since August 8
- Bitcoin (BTC $109,362) fell more than 1% below $112,000
- Other major tokens, including XRP ($2.7469), SOL ($196.78), and DOGE ($0.2277), dropped 2.6%–3%, with Solana nearing a break below $200
The CoinDesk 20 Index slid 2% to 3,940 points, while S&P 500 and Nasdaq futures traded flat to slightly positive.
Investor caution is likely linked to the looming shutdown, compounded by comments from San Francisco Fed President Mary Daly, who reaffirmed support for further rate cuts but emphasized a data-driven approach.
The Federal Reserve cut rates by 25 basis points on Sept. 17 and signaled the possibility of two additional cuts by year-end, though policymakers, including Chairman Jerome Powell, have signaled a cautious stance. Seven Fed officials, including New York Fed President John Williams, are scheduled to speak Thursday ahead of Friday’s PCE inflation report, the Fed’s preferred gauge of price pressures.
Market Outlook
“If inflation pressures remain contained, markets may interpret this as room for further Fed cuts, providing liquidity tailwinds into Q4. That could serve as a catalyst for BTC to attempt a long-awaited breakout,” said the QCP Capital market insights team.
