Crypto Markets Eye Regulatory Breakthrough as U.S. Government Shutdown Ends
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On November 12, President Donald Trump signed a short-term funding bill, ending the 43-day U.S. government shutdown. With the government reopened, key financial agencies can now resume their work. This is expected to restart efforts to create clear rules for the cryptocurrency industry.
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Political Gridlock Ends with a Short-Term Funding Bill
The funding bill was approved by the House and Senate, yet it faced significant Democratic opposition over the issue of Affordable Care Act credits.
A compromise was ultimately reached. This agreement allowed the government to reopen with the assurance that healthcare funding would be negotiated separately. Federal operations are now funded through January 2026.
This timeline provides a temporary window for legislators to concentrate on longer-term solutions, including the unresolved healthcare funding matter.
Crypto Industry Poised for Renewed Regulatory Momentum
The reopening of the U.S. government portends progress in the crypto industry concerning regulations.
For one, it means that staff at major regulatory bodies, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), can return to work.
Notably, several regulatory issues remain on the table. These include a recent resolution that could allow crypto trusts and exchange-traded funds (ETFs) to stake crypto and share rewards with their retail investors.
An update published by the Internal Revenue Service (IRS) revealed a few requirements for this to happen. It includes trading on a national securities exchange, holding only cash and “units of a single digital asset type,” and being held by a custodian.
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The update will require a vote by the Senate for approval. Now that the government has resumed several operations, there is renewed hope that this could be a reality.
Meanwhile, the industry has also been buzzing about a recent regulatory draft bill published by the Senate Agriculture Committee. Amongst other things, the draft proposes granting oversight of crypto trading activities to the CFTC, an agency whose prospective Chairman, Michael Selig, is expected to face his confirmation hearing on November 19.
Despite all the progress made on the regulatory front, actual crypto prices continue to struggle.
While crypto prices have historically increased, following an end to previous shutdowns, the macroeconomic headwinds facing the current market appear stronger.
Nevertheless, analysts remain confident that a bull run could still be possible.
Ben Lilly, an analyst at Browns Research and JLabs Digital, believes that several factors could still lead to a boom in prices. He believes the Federal Reserve will cut rates this month, and the Fed has already signaled an end to quantitative tightening in December. Additionally, he believes that fewer investors will take profits on their crypto holdings.
