Trump’s US Government Shutdown is Killing Market: Will Crypto Go Back Up Again?

The U.S. government shutdown has entered its 10th day under Donald Trump’s second term, freezing much of Washington and rattling the crypto market. With Congress gridlocked over border security and spending bills, investors are bracing for continued volatility.

While traditional markets reel, the crypto price of key assets like Bitcoin, Ethereum, and Litecoin has dipped amid uncertainty, though analysts believe the sell-off is temporary.

The real question traders are asking now: once Washington reopens and ETF approvals resume, will crypto go back up again?

How Is the U.S. Shutdown Impacting Crypto Markets?

The October 2025 partial government shutdown has halted primary federal functions, with over 800,000 federal workers furloughed and agencies like the SEC, IRS, and CFTC either fully closed or operating with skeleton staff.

Why are the markets relatively complacent in response to the US government shutdown? Alec Phillips, chief US political economist within Goldman Sachs Research, explains on the latest episode of Exchanges: https://t.co/ognNi1Kawc pic.twitter.com/pRckp8PuAF

— Goldman Sachs (@GoldmanSachs) October 9, 2025

This has paused all pending crypto ETF reviews, leaving more than 90 filings in limbo, from DOGE and XRP to LTC and HBAR. The SEC’s “emergency-only” policy means that even near-finalised ETFs, such as Canary Capital’s Litecoin (LTCC) and HBAR (HBR) funds, cannot move forward until funding resumes. The result?

Investors’ FUD has triggered outflows across altcoins, pushing

Hedera Hashgraph
HBAR

$0.1604

24.84%

Hedera Hashgraph
HBAR

Price

$0.1604

24.84% /24h

Volume in 24h

$193.78M
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down and

Litecoin
LTC

$95.84

23.74%

Litecoin
LTC

Price

$95.84

23.74% /24h

Volume in 24h

$1.26B
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slipping down. At the same time, Bitcoin briefly tested $120K before stabilizing.

Canary has filed an S-1 amendment for their $HBAR and $LTC Spot ETFs with tickers LTCC & HBR and related ETF fees.

According to Eric Balchunas, this could very well be the last step before an ETF launch:”which is typically the last thing updated bf go-time. With shutdown tho… pic.twitter.com/hBp82IZRf4

— ALLINCRYPTO (@RealAllinCrypto) October 8, 2025

Historically, government shutdowns cause short-term volatility but limited long-term harm. However, in the US crypto space, where regulation and ETF approvals drive sentiment, the timing couldn’t be worse.

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Why Are Analysts Still Bullish on a Crypto Rebound?

Despite near-term issues, most analysts see this correction as temporary turbulence rather than the end of the crypto season.

Bitcoin and Hold have both behaved like “safe havens”, with gold hitting new highs and Bitcoin reclaiming $120 post-dip.
The FIT21 crypto framework and pending ETF approvals are now widely expected to resume swiftly after the shutdown, potentially sparking the next leg up in Q4.
Bloomberg’s Eric Balchunas and James Seyffart confirmed that both LTC and HBAR ETFs are “at the goal line” with only final disclosures pending, the last step before official listing.

Once approved, ETFs could open billions in inflows, strengthening access for traditional investors. That’s why some traders view the shutdown as a pause before liftoff.

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Could Litecoin, HBAR, and Others Be the First to Pop?

Yes – and there’s growing data to support it. Litcoin (LTC) is already making its move, pushing more than 10% to over $130 mar,k and Hedera (HBAR) is positioning to be next.

(Source – TradingView)

Looks like traders are already taking positions in advance, speculating that the shutdown will end soon, with LTC reclaiming $130. If that is the case, HBAR could follow suit with a similar surge, potentially pushing the price to the $0.236 level. RSI levels appear to have bottomed out, and with Bitcoin holding support, this scenario seems highly plausible.

(Source – TradingView)

When Will Crypto Go Back Up Again?

Most signs point to a rebound once the government reopens and ETF approval restarts. In our case, we can see it already happening even before that, with the LTC crypto price going up. Shutdowns tend to create short-term selling, but pent-up demand for risk assets once clarity returns.

In short, Trump’s shutdown may be shaking markets now, but it’s also setting the stage for a robust recovery once Washington turns the lights back on. When that happens, expect the US crypto scene to go up again, led by the very tokens currently taking the biggest hit.

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