Will US Government Shutdown Affect Jobs, Economy, and Crypto?

US Government Shutdown Could Delay Jobs Report, Impact Crypto Markets

Is the United States heading into another government shutdown? 

That is the question dominating Washington and Wall Street as lawmakers scramble to reach a deal before the October 1 deadline. 

Senator J.D. Vance has warned that negotiations with Democrats are unlikely to break the deadlock, raising the chances of a shutdown this week.

According to prediction platform Kalshi, there is a 74% chance of a US government shutdown starting Wednesday. 

Impact on Jobs Data and Economic Reports

The Bureau of Labor Statistics (BLS) confirmed that if the US government shutdown, it will not release key economic data, including Friday’s jobs report. 

Source: The Kobeissi Letter

This report tracks U.S. employment for more than 160 million workers and is considered the single most important indicator for Federal Reserve decisions.

During the last major shut down in 2018–2019, about 800,000 federal employees were furloughed or worked without pay, while key agencies including the IRS and FDA slowed services.

The 35-day closure became the longest in US history and was estimated to shave $11 billion off GDP, according to the Congressional Budget Office.

Political Battle Over Funding

At the core of the crisis is a conflict between Democrats and Republicans for cutting healthcare and setting spending priorities.

House Republicans have put forward a temporary fix to continue funding the government until November, which Democrats rejected in exchange for healthcare subsidy protections.

President Donald Trump, the center of these negotiations, has been reluctant to compromise. He oversaw the longest shut down in history in 2019.

And now his administration has gone a step further, asking agencies to have reduction-in-force (RIF) plans available that could result in routine, not occasional, firings.

What It Means for Bitcoin and Crypto

The impact of the US government shutdown is not limited to Washington, but it is also rattling the global markets. 

Bitcoin price recovered above $114,000, up 3.6% in the last 24 hours, while Ethereum rose to $4,180, up 3.5%. 

Source: CoinMarkatCap

But both assets remain below recent highs, with Bitcoin still 0.7% under its level two weeks ago. On the other hand gold is hitting new highs at $3,869.  

Past shutdowns have delivered mixed results for crypto. 

In 2013, Bitcoin rose 14%, while the 2018–2019 shut down saw a 6% drop. Analysts warn that without the jobs report, traders will struggle to predict Fed rate cuts, creating spikes in volatility.

Bitunix analysts noted that “short-term risks remain elevated,” with futures and options activity already showing stress. CME data also shows an open gap in Bitcoin futures that could add to price swings if funding stops. 

Source: X (formerly Twitter) 

How This Shutdown Differs From Past Ones

In contrast to past shutdowns, the Office of Management and Budget requested agencies to plan for some programs having permanent layoffs. That would be a significant departure from past shutdowns, when workers were typically sent home on furlough and then got back pay. 

Crypto markets closely observing, this impending US government shutdown might become one of the most disruptive in recent times.