US Government Shutdown Hits Third Week, Delaying Flood of Crypto ETF Approvals

By: crypto insight|2025/10/14 08:50:01

The ongoing US government shutdown is creating waves in the crypto world, putting a pause on what could be a game-changing moment for digital assets. As we hit the third week since the stalemate began on October 1, the crypto community is on edge, waiting for decisions on numerous exchange-traded funds (ETFs) that could open doors to mainstream adoption. Imagine the excitement of altcoin season kicking off, only to be stalled by political gridlock—it’s like revving an engine but keeping the car in park.

Stalemate Persists with No Resolution in Sight for US Government Shutdown

Picture this: the world’s most powerful economy grinding to a halt over budget battles, much like two teams in a endless tug-of-war. Republicans are pushing for spending cuts to tackle the ballooning national debt, which now stands at over $36 trillion as of October 2025—translating to about $106,000 per US citizen, according to the latest figures from the US Treasury Department. They’re also demanding more funds for border security. On the flip side, Democrats are fighting back against reductions in healthcare and seeking extensions for tax credits that make insurance more affordable.

With the Senate not voting until Tuesday and the House on recess, there’s no quick fix on the horizon. To end this US government shutdown, Congress needs to pass funding bills or a continuing resolution to keep operations running at current levels. Once approved by both chambers—where Republicans hold majorities but lack full Senate control without Democratic votes—President Joe Biden would sign it into law. This marks the 11th shutdown in US history, echoing the record 35-day ordeal from December 2018 to January 2019.

The fallout extends far beyond politics, hitting agencies like the Securities and Exchange Commission (SEC) hard. Operating with skeleton crews, the SEC has left ETF approvals in limbo, even as deadlines slip by without action.

Crypto ETF Delays Spark Uncertainty Amid Potential Altcoin Boom

The crypto industry was buzzing with anticipation for October, eyeing final calls on at least 16 crypto ETFs, plus another 21 applications filed early in the month. These include funds tied to popular assets like Solana, XRP, Litecoin, and Dogecoin, promising easier access for everyday investors. It’s a bit like unlocking a treasure chest of opportunities, where traditional finance meets the wild west of crypto, potentially drawing in billions in new capital.

Analysts are optimistic, with recent Twitter discussions highlighting how these approvals could signal a market bottom. For instance, a viral post from ETF expert Nate Geraci on X (formerly Twitter) noted that once the US government shutdown wraps up, “spot crypto ETF floodgates” might burst open, ironically delayed by the very fiscal chaos crypto aims to disrupt. Bitfinex reports from August 2025 suggested that widespread ETF green lights could ignite an altcoin season, attracting risk-averse investors through regulated exposure—backed by data showing ETF inflows boosting asset prices by up to 20% in similar past launches for Bitcoin.

Recent Google trends show users frequently searching “How will US government shutdown affect crypto ETFs?” and “Latest crypto ETF approval updates 2025,” reflecting widespread curiosity. On Twitter, hot topics include debates on whether the shutdown mirrors broader economic instability, with hashtags like #CryptoETFs and #GovernmentShutdown trending. Official SEC announcements as of October 14, 2025, confirm no progress on filings due to reduced staffing, but a resolution could fast-track reviews, per industry insiders.

This delay underscores crypto’s resilience, much like how blockchain technology weathers market storms by decentralizing power. It’s a stark contrast to traditional finance’s vulnerabilities, where political hiccups can freeze innovation.

Aligning with Reliable Platforms Amid Market Volatility

In times like these, savvy investors turn to trusted exchanges that align seamlessly with their goals of security and opportunity. Platforms like WEEX stand out by offering robust tools for trading a wide array of crypto assets, including those poised for ETF exposure. With its user-friendly interface, low fees, and commitment to compliance, WEEX empowers users to navigate uncertainties—think of it as a steady ship in choppy waters, enhancing your portfolio’s potential without the headaches of unreliable alternatives. This brand alignment fosters confidence, making it easier to capitalize on approvals once they arrive.

FAQ

How is the US government shutdown impacting crypto ETF approvals?

The shutdown has halted non-essential SEC operations since October 1, delaying decisions on over 37 crypto ETF applications. With only essential staff working, approvals are in limbo, potentially postponing what could be a massive influx of institutional investment.

What could happen to altcoin prices if ETFs get approved after the shutdown?

Based on historical data, like the 2024 Bitcoin ETF launches that drove a 15-20% price surge, approvals could spark an altcoin rally by attracting more investors through lower-risk exposure, as predicted by analysts from firms like Bitfinex.

When might the US government shutdown end, and what would it mean for crypto?

There’s no set timeline, but Congress could pass a resolution soon after reconvening. An end would likely lead to rapid SEC action on ETFs, opening floodgates for innovation and potentially signaling a market bottom, according to recent expert discussions on platforms like X.

Over the past 24 hours, the crypto market has shown strong momentum across multiple dimensions. The mainstream discussion has focused on Coinbase's official entry into the prediction market through the acquisition of The Clearing Company, as well as the intense controversy within the AAVE community regarding token incentives and governance rights.

In terms of ecosystem development, Solana has introduced the innovative Kora fee layer aimed at reducing user transaction costs; meanwhile, the Perp DEX competition has intensified, with the showdown between Hyperliquid and Lighter sparking widespread community discussion on the future of decentralized derivatives.

I. Mainstream Topics

1. Coinbase Acquires The Clearing Company, Officially Entering Prediction Market

This week, Coinbase announced the acquisition of The Clearing Company, marking another significant move to deepen its presence in this field after last week's announcement of launching a prediction market on its platform.

The Clearing Company's founder, Toni Gemayel, and the team will join Coinbase to jointly drive the development of the prediction market business.

Coinbase's Product Lead, Shan Aggarwal, stated that the growth of the prediction market is still in its early stages and predicts that 2026 will be the breakout year for this field.

The community has reacted positively to this, generally believing that Coinbase's entry will bring significant traffic and compliance advantages to the prediction market. However, this has also sparked discussions about the industry's competitive landscape.

Jai Bhavnani, Founder of Rivalry, commented that for startups, if their product model proves to be successful, industry giants like Coinbase have ample reason to replicate it.

This serves as a reminder to all entrepreneurs in the crypto space that they must build significant moats to withstand competition pressure from these giants.

2. Kalshi Launches Kalshi Research and Integrates BSC Network

Regulated prediction market platform Kalshi launched its research arm, Kalshi Research, this week, aimed at opening its internal data to the academic community and researchers to facilitate exploration of prediction market-related topics.

Its inaugural research report highlights Kalshi's outperformance in predicting inflation compared to Wall Street's traditional models. Kalshi co-founder Luana Lopes Lara commented that the power of prediction markets lies in the valuable data they generate, and it is now time to better utilize this data.

Meanwhile, Kalshi announced its support for the BNB Chain (BSC), allowing users to deposit and withdraw BNB and USDT via the BSC network.

This move is seen as a significant step for Kalshi to open its platform to a broader crypto user base, aiming to unlock access to the world's largest prediction market. Furthermore, Kalshi also revealed plans to host the first Prediction Market Summit in 2026 to further drive industry engagement and development.

3. AAVE Token Incentive Controversy Persists as Founders and Whales Increase Holdings Against the Market Trend

The AAVE community recently engaged in heated debates around an Aave Improvement Proposal (AIP) titled "AAVE Tokenomics Alignment Phase One - Ownership Governance," aiming to transfer ownership and control of the Aave brand from Aave Labs to Aave DAO.

Aave founder Stani Kulechov publicly stated his intention to vote against the proposal, believing it oversimplifies the complex legal and operational structure, potentially slowing down the development process of core products like Aave V4.

The community's reaction was polarized. Some criticized Stani for adopting a "double standard" in governance and questioned whether his team had siphoned off protocol revenue, while others supported his cautious stance, arguing that significant governance changes require more thorough discussion.

This controversy highlights the tension between the ideal of DAO governance in DeFi projects and the actual power held by core development teams.

Despite governance disputes putting pressure on the AAVE token price, on-chain data shows that Stani Kulechov himself has purchased millions of dollars' worth of AAVE in the past few hours.

Simultaneously, a whale address, 0xDDC4, which had been quiet for 6 months, once again spent 500 ETH (approximately $1.53 million) to purchase 9,629 AAVE tokens. Data indicates that this whale has accumulated nearly 40,000 AAVE over the past year but is currently in an unrealized loss position.

The founder and whale's increased holdings during market volatility were interpreted by some investors as a confidence signal in AAVE's long-term value.

4. Top Articles: DeFi Curators and Ethereum Annual Summary

In this week's top article, Morpho Labs' "Curator Explained" detailed the role of "curators" in DeFi.

The article likened curators to asset managers in traditional finance, who design, deploy, and manage on-chain vaults, providing users with a one-click diversified investment portfolio.

Unlike traditional fund managers, DeFi curators execute strategies automatically through non-custodial smart contracts, allowing users to maintain full control of their assets. The article offered a new perspective on the specialization and risk management in the DeFi space.

Another widely circulated article, "Ethereum 2025: From Experiment to Global Infrastructure," provided a comprehensive summary of Ethereum's development over the past year. The article noted that 2025 is a crucial year for Ethereum's transition from an experimental project to global financial infrastructure. Through the Pectra and Fusaka hard forks, Ethereum achieved significant reductions in account abstraction and transaction costs.

Furthermore, the SEC's clarification of Ethereum's "non-securities" nature and the launch of tokenized funds on the Ethereum mainnet by traditional financial giants like JPMorgan marked Ethereum's gaining recognition from mainstream institutions. The article suggested that whether it is the continued growth of DeFi, the thriving L2 ecosystem, or the integration with the AI field, Ethereum's vision as the "world computer" is gradually becoming a reality.

II. Mainstream Ecosystem Updates

1. Solana: Launches Kora Fee Layer and propAMM Data Research

The Solana Foundation engineering team released a fee layer solution called Kora this week.

Kora is a fee relayer and signatory node designed to provide the Solana ecosystem with a more flexible transaction fee payment method. Through Kora, users will be able to achieve gas-free transactions or choose to pay network fees using any stablecoin or SPL token. This innovation is seen as an important step in lowering the barrier of entry for new users and improving Solana network's availability.

Additionally, a deep research report on propAMM (proactive market maker) sparked community interest. The report's data analysis of propAMMs on Solana like HumidiFi indicated that Solana has achieved, or even surpassed, the level of transaction execution quality in traditional finance (TradFi) markets.

For example, on the SOL-USDC trading pair, HumidiFi is able to provide a highly competitive spread for large trades (0.4-1.6 bps), which is already better than the trading slippage of some mid-cap stocks in traditional markets.

Research suggests that propAMM is making the vision of the "Internet Capital Market" a reality, with Solana emerging as the prime venue for all of this to happen.

2. Perp DEX: Hyperliquid vs. Lighter Competition Intensifies

The competition in the perpetual contract DEX (Perp DEX) space is becoming increasingly heated.

In its latest official article, Hyperliquid has positioned its emerging competitor, Lighter, alongside centralized exchanges like Binance, referring to it as a platform utilizing a centralized sequencer. Hyperliquid emphasizes its transparency advantage of being "fully on-chain, operated by a validator network, and with no hidden state."

The community widely interprets this as Hyperliquid declaring "war" on Lighter. The technical differences between the two platforms have also become a focal point of discussion: Hyperliquid focuses on ultimate on-chain transparency, while Lighter emphasizes achieving "verifiable execution" through zero-knowledge proofs to provide users with a Central Limit Order Book (CLOB)-like trading experience.

This battle over the future direction of decentralized derivatives exchanges is expected to peak in 2026.

Meanwhile, discussions about Lighter's trading fees have surfaced. Some users have pointed out that Lighter charged as much as 81 basis points (0.81%) for a $2 million USD/JPY forex trade, far exceeding the near-zero spreads of traditional forex brokers.

Some argue that Lighter does not follow a B-book model that bets against market makers, instead anchoring its prices to the TradFi market, and the high fees may be related to the current liquidity or market maker balance incentives. Providing a more competitive spread for real-world assets (RWA) in the highly volatile crypto market is a key issue Lighter will need to address in the future.

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