How Will The U.S. Government Shutdown Affect the Crypto Industry?

As the United States teeters on the brink of yet another government shutdown, concerns are mounting about how this may affect the already unstable cryptocurrency industry. Past shutdowns have had a noticeable impact, and this time might be no different.

All we can do is stay prepared. Here’s what you can expect.

A Flashback to Previous Shutdowns

Previous government shutdowns have caused significant delays in decision-making for cryptocurrency-related businesses. For example, an ambitious proposal for a bitcoin exchange-traded fund was shelved, with insiders pointing to the shutdown as the cause.

Currently, all eyes are on the U.S. Securities and Exchange Commission (SEC), which seems to be cautiously delaying its decisions on Bitcoin exchange-traded fund (ETF) applications. Furthermore, cryptocurrency exchange giant Coinbase is eagerly awaiting a response from the SEC regarding its Mandamus petition, due on October 11.

Also Read: Top Crypto CEOs Are Leaving the USA! John Deaton Pins Blame on SEC

Critical Times for Crypto

This potential shutdown comes at a critical time for the crypto sector. The industry’s endeavors in the U.S. might face further disruptions, but experts believe essential matters will not go completely unnoticed, albeit with possible delays.

Historically, during shutdowns, the agency paused litigation where feasible, excluding cases jeopardizing consumer assets. Additionally, the approval process for new products would be put on hold. This doesn’t bode well for enterprises awaiting the SEC’s decisions on Bitcoin applications or firms like Coinbase and Binance, currently entangled in legal disputes.

Read More: The US Lawmakers Urge SEC to Speed Up Bitcoin ETF Approval Process

We’re on a rocky path

The crypto market is uncertain, with all top 10 cryptocurrencies showing declining figures. If a shutdown were to occur, this trend might be exacerbated. With regulatory decisions being pivotal for the market’s stability, any delay could deter potential investors, causing a further dip.

Investors might also become wary, leading to potential sell-offs. Uncertainty is what drives volatility in the market.

Tick-Tock!

Should Congress fail to take timely action, the U.S. government could come to a grinding halt this weekend. Here’s how it works: The U.S. Constitution empowers Congress with the authority to make financial decisions, and each fiscal year, starting on October 1, requires Congress to approve spending bills. Missing this deadline results in a funding gap, leading to the suspension of non-essential government functions.

If Congress remains inactive, the shutdown will begin shortly after midnight on October 1. Predicting the duration of the shutdown is challenging due to the ongoing discord on Capitol Hill.

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