US shutdown fears hit crypto sentiment as safe havens surge

The risk of a US government shutdown has surged, with Polymarket pricing the odds at nearly 78% ahead of the January 31 deadline.

The spike follows a funding deadlock over the Department of Homeland Security, paralysing negotiations in Washington.

The Crypto Fear and Greed Index has flipped back to “Extreme Fear” after briefly recovering to neutral last week.

The House of Representatives passed a stopgap funding bill, but Senate Democrats have blocked its advance.

“Democrats sought common-sense reforms in the Department of Homeland Security spending bill, but because of Republicans’ refusal to stand up to President Trump, the DHS bill is woefully inadequate to rein in the abuses of ICE. I will vote no,”

Chuck Schumer said.

Analysts warned the impasse could trigger a data blackout, delaying CPI and jobs reports critical to Federal Reserve policy decisions.

“The government will shut down in 6 days. Because we’re heading into a total data blackout,”

Macro analyst NoLimit wrote.

Polymarket traders are also betting on risks including delayed data, potential credit downgrades, liquidity freezes, and a weekly GDP hit of around 0.2%.

“Most people are ignoring this, but the shutdown risk is getting real,”

DeFi researcher Justin Wu said.

Gold climbed to a record above $5,000 per ounce, while silver broke $100 as investors rushed into safe havens.

Bitcoin has remained volatile, with investors wary of liquidity shocks and delayed economic signals.

During the 2025 shutdown, bitcoin fell around 20%, reinforcing its sensitivity to prolonged fiscal disruption.

“Clearly there is not an appetite to do this again,”

Rachel Bade said, pointing to recent bipartisan efforts to avoid a repeat.

At the time of reporting, Bitcoin price was $86,622.73.