Ether (ETH $3,958) led losses among major cryptocurrencies Thursday during Asian trading hours, as the probability of a U.S. government shutdown reached record highs.
On the decentralized prediction platform Polymarket, “Yes” shares for the contract “U.S. government shutdown in 2025?” jumped to 77%, the highest since its January launch. Traders are effectively pricing a 77% chance of a shutdown by Dec. 31, with the odds of a shutdown by Oct. 1 at 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 directed federal agencies to draft contingency plans in case spending legislation is not approved next week.
The government is expected to run out of funds by the end of September. To avoid a shutdown, Congress must either pass a short-term continuing resolution or finalize the 12 full-year appropriations bills, which would require bipartisan support to reach the 60-vote threshold.
Crypto Markets Under Pressure
- Ether fell over 3%, testing the $4,000 level for the first time since August 8
- Bitcoin (BTC $109,362) dropped more than 1% below $112,000
- Other tokens, including XRP ($2.7469), SOL ($196.78), and DOGE ($0.2277), declined 2.6%–3%, with Solana approaching a break below $200
The CoinDesk 20 Index slid 2% to 3,940 points, while S&P 500 and Nasdaq futures remained flat to slightly positive.
Investor caution is likely tied to the looming shutdown, compounded by comments from San Francisco Fed President Mary Daly, who reiterated support for further rate cuts but stressed a data-dependent approach.
The Fed cut rates by 25 basis points on Sept. 17 and indicated the possibility of two additional cuts by year-end, though policymakers—including Chairman Jerome Powell—have signaled a cautious pace. 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 measure of price pressures.
Market Outlook
“If inflation pressures remain contained, markets could interpret this as room for further Fed cuts, providing liquidity tailwinds into Q4. That may act as a catalyst for BTC to attempt a long-awaited breakout,” said the QCP Capital market insights team.
