The U.S. government reopens: the chain shock caused by the 41-day shutdown

1. Event review: Washington was “out of power” for 41 days

On October 1, 2025, the United States officially shut down due to the failure to pass appropriations in time.Funding has been frozen, federal agencies are operating at a minimum, some employees have been furloughed, and supervision has been terminated.It was not until November 12 that the 41-day political deadlock came to an end through temporary appropriation.

This is one of the last of its kind in the United States, with implications extending beyond the executive to market confidence, liquidity, and the pace of fintech and crypto regulation.

2. Institutional mechanism: Why the U.S. government “shuts down”

The U.S. fiscal year begins on October 1 of each year.According to the Anti-Appropriations Act (Anti-Deficit Act), if Congress fails to pass appropriations or temporarily continue appropriations (continuing resolution, CR) before the start of the new fiscal year, government agencies will be forced to suspend non-essential operations due to “no legal source of funding” and only maintain emergency and security-related reserves.

The original intention of the system design is to prevent the government from “over-budget” expenditure, but in the reality of extremely partisan politics, it has become a high-risk political bargaining chip.Appropriation amounts are often tied up in major policy arenas. Once negotiation disputes occur, it will trigger a “blackout” of the entire system – federal employee suspensions, project interruptions, regulatory administrative delays, and economic data release infringements.

3. Suspension of Funds: The Game of Budget and Politics

Controversies at the heart of the shutdown include:

1. Appropriation period scope: The fiscal year 2025 budget begins on September 30. The new round of appropriation plans failed to be approved in the first batch of appropriations, and the provisional renewal (CR) appropriation was deadlocked between the House and the Senate.

2. Party establishment and policy gaps:
   Cambodia respects Affordable Care Act (ACA) taxes, social spending; agrees to cancel
   And the administration reduced the fiscal scale, reallocated priorities, and launched the “cancellation bill reduction mechanism”, including reducing foreign aid and some public projects.

3. Fiscal negotiations as a politicized strategy: The shutdown has increasingly become a tool for political gaming.All parties have tried to “change policies” and use the pressure of the shutdown to win public opinion and policy concessions.

The result is the reappearance of institutional risks: the appropriation mechanism itself has been politicized, and fiscal governance capabilities have suffered significant losses.

4. Chain reaction between economy and market

• Macro level: The federal budget, about 80 contracts were forced to take vacations, government vacations, tax avoidance data (such as CPI, employment report) were suspended, investors increased tax allocation in the information gap, and enhanced market changes.

• Financial market: The U.S. dollar index is under periodic pressure, the bond market’s understanding of long-term fiscal deficits has weakened, and U.S. stocks and technology stocks have experienced short-term fluctuations.Companies are postponing investment decisions, the market has questioned the U.S.’s fiscal governance capabilities, and the U.S. dollar index has been under periodic pressure.

• Institutional signal: The confrontation exposed the structural fragility of the U.S. budget system – the political sector, which has caused fiscal decision-making to shift from governance to mechanism negotiation strategies.

5. Cryptocurrency and financial technology: the regulatory rhythm of mandatory “pause”

1. Supervision activities are hindered

During the shutdown, the operational structures of key institutions such as the SEC and CFTC resulted in a collective “pause button” for processes such as crypto-asset ETFs, market structure reforms, and token registration rockets; multiple market entities reported delays and communication delays, and the compliance projects of some trading platforms and custodians were forced to be postponed.

2. The “freezing effect” of market sentiment

During the shutdown, the overall circulation market value of the crypto market increased with a potential loss of approximately US$400 billion (Bitget statistics), and on-chain capital flows such as BTC and ETH price bonds took a defensive stance.Investors tend to direct funds towards short-term bonds and stable defensive assets.

3. “Accelerated compensation” after the lockout ends

After the funding was passed on November 12, Congress and regulatory agencies quickly resumed, including:

• Review of the Crypto Market Structure Bill resumes;

• The digital asset token classification system (Token Taxonomy) is proposed to be formally included in the discussion by the SEC;

• Several crypto ETFs receive re-examination in Madrid.The policy recovery has brought short-term benefits to the market, and some mainstream currencies have rebounded.

6. Global Observation: System easing and innovation tension

The symbolic significance of the maintenance shutdown is that the tension between the strength of the United States’ institutions and political divisions is spreading to the borders of technology and finance.

In an era where regulatory rhythms are replaced by political lines, the financial technology and encryption industries must possess “triple adaptability”:

• Pre-positioning compliance: establishing a cross-jurisdictional compliance system in advance to reduce single market risks;

• Risk hedging/globalization layout: simultaneously promote asset structure design in multiple jurisdictions (the United States, Hong Kong, and the European Union);

• Transparent communication: maintain regulatory information disclosure and market trust, and reduce the impact of sudden policy fluctuations.

7. Conclusion: Crisis and window coexist

The end of the shutdown does not mean the end of the political deadlock.But it reminds us that macro policy uncertainty is gradually becoming a systemic variable in the new finance and encryption industries.For entrepreneurs and institutions in areas such as Web3, digital payment, and asset tokenization, the game between institutional risks and technological innovation will become the core proposition of the next cycle.