Relief rally possible as political breakthrough reduces uncertainty for Bitcoin and risk assets
The U.S. Senate has reportedly reached a breakthrough on a three-part budget deal to end the ongoing government shutdown, a move analysts say could offer a near-term boost to Bitcoin (BTC) and the broader crypto market.
According to a Politico report, the pending legislation to fund government operations has gathered enough bipartisan support to surpass the crucial 60-vote threshold, with an official vote expected within days. The agreement follows Senate Majority Leader John Thune’s fifteenth attempt to win cross-party backing for a House-approved bill — potentially bringing an end to the record 40-day shutdown.
Bitcoin reacts to political headlines
Uncertainty surrounding the shutdown had been weighing on investor sentiment in recent weeks, limiting upside momentum for digital assets. Bitcoin, which briefly touched $126,080 on October 6, has since fallen over 17% to around $104,370, according to BITXjournal data.
The decline accelerated after President Donald Trump announced 100% tariffs on Chinese imports, sending shockwaves through equity and crypto markets alike. However, signs of a fiscal resolution are now being viewed as a potential turning point.
“Markets hate uncertainty — and this shutdown has been one of the biggest macro headwinds for risk assets,” said one analyst. “A clean resolution could quickly restore confidence and liquidity flows into crypto.”
Historical precedent favors upside
The last U.S. government shutdown, which ended in January 2019 during Trump’s first term, was followed by a 265% surge in Bitcoin’s price, climbing from $3,550 to nearly $13,000 within five months.
Prediction market Polymarket currently gives a 54% probability that the government will reopen between Tuesday and Friday, up from just 27% a day earlier. Rival platform Kalshi places similar odds, estimating the impasse could end by Friday, the 44th day of the shutdown.
With fiscal optimism rising and Trump’s separate $2,000 “tariff dividend” proposal still in the headlines, analysts say a short-term crypto rebound could be imminent — provided Washington finally breaks its budget stalemate.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.