US Government Shutdown Risk Reignites, Crashes Crypto Market Sentiment

The risk of a US government shutdown by January 31 has dramatically increased, with prediction markets on Polymarket pricing the odds at approximately 78%, up from 10% days prior, primarily due to partisan deadlock over Department of Homeland Security (DHS) funding, specifically concerning Immigration and Customs Enforcement (ICE).

This uncertainty has caused the Crypto Fear and Greed Index to drop to 'Extreme Fear,' contrasting with a recent neutral sentiment. The potential shutdown threatens a 'data blackout' by delaying crucial economic indicators like CPI and jobs reports, which complicates Federal Reserve policy and increases market volatility. Analysts warn that a prolonged impasse could lead to liquidity freezes, potential credit downgrades, and a weekly GDP contraction of about 0.2%.

In response to the risk-off environment, safe-haven assets are surging; gold has hit a new all-time high above $5,000 per ounce, and silver has broken $100 per ounce. This mirrors trends from the record 43-day shutdown in late 2025, during which Bitcoin also fell significantly. While Congress could avert the shutdown via an extension, the current deadlock has market participants bracing for disruption.

(Source：BeInCrypto)