US Senate leaders and the White House say they have reached a bipartisan framework to avert a partial government shutdown, though the agreement still must pass key votes in Congress before federal funding expires.
Talks had stalled over funding for the Department of Homeland Security and immigration enforcement, with the current stopgap spending bill set to lapse at midnight Eastern Time on Friday. Lawmakers are now racing to finalize the package and push it through Congress ahead of the deadline.
On Thursday evening, President Donald Trump warned that the “only thing” that could slow the country down was “another long and damaging Government Shutdown,” adding that he was “working hard with Congress” to secure the necessary funding.
The emerging deal has eased some immediate concerns over a prolonged funding lapse following a volatile week in markets. Bitcoin fell to around $81,000, while spot Bitcoin and Ether exchange-traded funds recorded roughly $1 billion in combined outflows.
Broader risk assets also swung on a mix of Federal Reserve signals, shutdown uncertainty and geopolitical headlines. At the same time, traditional safe havens and industrial commodities—including gold, silver and oil—saw sharp price moves as investors repositioned, Reuters reported.
TGA expands ahead of potential spending pause
Nick Heather, head of trading at One.io, told Cointelegraph that Bitcoin’s decline reflected tightening liquidity conditions rather than crypto-specific weakness.
“Bitcoin’s move down to the low-$80,000s looks far more like a liquidity-driven adjustment than a loss of conviction in the asset itself,” Heather said.
On Friday, BitMEX co-founder Arthur Hayes pointed to an estimated $300 billion contraction in US dollar liquidity in recent weeks, largely driven by an increase in the Treasury General Account (TGA). Hayes argued the government may be building cash buffers ahead of possible spending disruptions, with Bitcoin’s decline aligning with tighter dollar conditions.
Heather added that when the US Treasury rebuilds its cash balance, “risk assets tend to come under pressure, and crypto is often one of the first to react.”
He noted that onchain data shows whale wallets remain largely inactive, suggesting larger holders have not begun accumulating and reinforcing the view that recent price moves are driven by liquidity rather than shifts in long-term conviction.
Geopolitics keep markets on edge
Investor sentiment remained fragile on Friday after Trump declared a national emergency over Cuba and signaled earlier in the week that he was weighing military options related to Iran’s nuclear and missile programs, keeping geopolitical risks in focus.
Precious metals, which surged to record highs earlier in January, have since sold off sharply. Silver has “officially” entered bear market territory, down 22% from its peak, according to The Kobeissi Letter. Gold briefly slipped below $5,000 per ounce before rebounding to around $5,100 at the time of writing, TradingView data shows.
Past shutdowns and Bitcoin’s performance
Previous US government shutdowns have typically weighed on business and consumer confidence, delayed the release of key economic data, and raised concerns about the country’s fiscal outlook. These dynamics have often translated into heightened volatility across equities, bonds, the dollar and cryptocurrencies.
Historically, government shutdowns tend to generate uncertainty rather than clear market direction, Nick Heather said, noting that for Bitcoin, “the immediate impact is usually higher volatility, not a clean trend.”
Heather added that even if a shutdown is ultimately avoided, markets are still contending with tightening financial conditions and elevated geopolitical risks.
“Until there is clearer visibility on liquidity and policy,” he said, “both traditional and digital asset markets are likely to remain highly sensitive to headlines and prone to sudden repricing.”
