US shutdown triggers crypto market volatility

The US government shutdown on Jan 31, 2026, triggered volatility in financial and crypto markets. Bitcoin dropped sharply before partially recovering, while uncertainty persists.

The US government entered a partial shutdown on January 31, 2026, after Congress failed to pass a new budget by the deadline. Disagreements over funding, especially for the Department of Homeland Security, led to the suspension of several federal agencies. Essential services, such as national security and air traffic control, continue to operate. The shutdown has created uncertainty in financial markets, with the crypto sector experiencing heightened volatility. Nearly $200 billion was wiped from crypto market value following sharp declines in gold and silver prices. Bitcoin fell from around $88,000 to below $82,000 before partially recovering. Despite initial concerns, some analysts suggest the impact on crypto assets was largely priced in, and no major drawdown followed the correction. The ongoing budget impasse and political disputes, particularly over immigration, remain unresolved, leaving the duration of the shutdown uncertain and markets on edge.