The possibility of a US government shutdown has increased to levels not seen in years, with predictive market Kalshi indicating a 73% likelihood that lawmakers will fail to pass a funding bill before the October 1st deadline. This sharp increase reflects the weeks of stalemate in Congress and President Donald Trump’s decision to terminate budget negotiations with Democratic leaders, limiting the path to compromise.
The federal government will lose authority if lawmakers do not reach an agreement by September 30th at midnight, resulting in non-essential operations coming to a halt. This would mirror the 34-day shutdown during Trump’s first term, which furloughed hundreds of thousands of employees.
Closure of the US Government
In light of this, both parties are pointing fingers over the impasse. Former President Barack Obama argued that “Republicans would rather shut down the government than help millions of Americans afford healthcare.” However, the White House countered that Democrats are pushing the nation “to the brink” by jeopardizing funds for veterans, seniors, and law enforcement agencies.
The consequences of a shutdown would extend beyond Washington, particularly for the crypto sector. XRP, the third-largest crypto asset by market capitalization, is at the center of several initiatives involving government agencies. A shutdown would reduce personnel from regulatory bodies such as the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), slowing or halting reviews of digital asset applications.
Impact on XRP
This is significant because several applications for Spot Crypto Exchange-Traded Funds (ETFs), including those related to XRP, are pending review. Six companies, including Grayscale and 21Shares, have submitted Spot XRP ETFs. ETF analyst Nate Geraci described the upcoming quarter as “enormous” for review calendars, with decisions expected on several tokens.
Any disruption to the regulatory workflow could delay approvals. Since Spot ETFs offer regulated exposure to institutions and retail investors, this could weaken the impulse analysts expect to increase new inflows into digital assets.
Ripple is also exposed to a second vulnerability. The application for a US National Bank Charter, a step the company has deemed crucial for building payment rails with dollars, depends on reviews by the Office of the Comptroller of the Currency (OCC). A prolonged shutdown would pause these reviews, postponing a milestone in Ripple’s US strategy.
Effects on XRP Price
This uncertainty could also impact the spot market value of the digital asset. Despite consistent institutional interest, the token has traded in a narrow range of less than $3 over the past month.
However, technical analyst Ali Martinez found that whales have bought 120 million XRP in the last 72 hours, signaling newfound trust in the market. This sets the stage for a crucial period in which XRP can hold its ground and potentially build market momentum.
At the time of press, XRP is ranked 4th by market capitalization, with a price increase of 3.05% in the last 24 hours. XRP has a market capitalization of $172.98 billion and a 24-hour trade volume of $4.91 billion. The entire crypto market is valued at $3.9 trillion, with a 24-hour volume of $166.68 billion. Bitcoin dominance is currently at 58.08%.
For more information on the potential impact of a US government shutdown on XRP, visit https://cryptoslate.com/how-a-us-government-shutdown-will-impact-xrp/
