Thursday was rough for crypto holders as Ethereum dropped over 3% and nearly touched $4,000 for the first time since early August. Bitcoin wasn’t spared either, falling more than 1% to slip under $112,000 . The whole market seemed spooked by rising chances that the US government could shut down in the coming weeks.
Prediction markets are now showing a 76% chance of a government shutdown happening before the end of 2025, with a 63% probability it could happen as soon as October 1st. Those are some pretty scary odds, and apparently crypto traders are taking notice.
The White House is already preparing for the worst-case scenario, asking federal agencies to get ready for staff cuts and furloughs if Congress can’t pass a spending bill by next week. The government is expected to run out of money by the end of September, which means lawmakers need to either pass a temporary funding measure or somehow get 12 full-year budget bills approved. Good luck with that.
Other major cryptocurrencies got hammered too. XRP dropped 2.6%, Solana fell about 3% and looks like it might break below $200, and even meme coins like Dogecoin took a hit. The overall crypto market index was down 2%, while traditional stock futures actually stayed flat or slightly positive.
Adding to the pessimistic mood, San Francisco Fed President Mary Daly talked about more rate cuts but wouldn’t give a timeline, which didn’t help investor confidence. The Fed cut rates recently but officials have been pretty cautious about future cuts since then.
Conclusion
Crypto markets slumped Thursday as shutdown fears, Fed uncertainty, and broad sell-offs rattled investors. With Ethereum nearing $4,000 and Bitcoin sliding under $112,000, traders face mounting volatility while traditional markets remain relatively steady.
Also Read: Massive Outflow Hits Crypto
