Institutional demand for digital assets rose significantly as investors digested news that the US Senate could reach a much-anticipated deal that would soon end the 40-day government shutdown.
On Sunday, the US Senate advanced a procedural vote to finish the federal government shutdown. According to the Senate's schedule, the ultimate vote after the federal government shutdown is scheduled to happen on Monday.
Following the report, cryptocurrency markets experienced a surge. According to CoinMarketCap data, the Starknet (STRK) token was the largest every day gainer, rising over 43%, followed by the Trump-backed World Liberty Financial (WLFI) token, which gained 28% within the last 24 hours.
The approaching end of the federal government shutdown could reduce “financial uncertainty” amongst global investors and spur a crypto market recovery, Nicolai Sondergaard, research analyst at crypto intelligence platform Nansen, told Cointelegraph.
“For weeks, markets effectively operated in the dead of night, with key economic data releases, policy updates and regulatory processes frozen throughout the shutdown.”
Once government business resumes, investors will give you the chance to “price in real fundamentals fairly than speculation” as major federally backed releases have been canceled because of the shutdown, Sondergaard added.
Top 10 winners by 24-hour performance. Source: CoinMarketCap
Institutions are resuming their Ether accumulation, fueled by the prospect of an end to the US government shutdown
Following news of the potential end to the 40-day government shutdown, institutional investors have resumed their accumulation of Ether (ETH) based on growing average spot order data.
According to crypto intelligence platform CryptoQuant, Ethereum could enter a phase of “accumulation with low volatility” if Ether price manages to remain above the $3,000-$3,400 range.
However, the broader market's recovery will ultimately rely upon incoming Bitcoin (BTC) and Ether ETF inflows, which is able to ultimately determine whether this recovery will generate “sustained institutional demand and not only retail or short-term flows,” in line with a report from Nomura Group's Laser Digital derivatives trading office shared with Cointelegraph.
The looming end of the federal government shutdown raises hopes of “floodgates” for altcoin ETFs
In the broader crypto space, ETF analyst Nate Geraci sees the tip of the shutdown as a positive development that can open the ETF floodgates.
“End of presidency shutdown = opening floodgates for spot crypto ETFs,” Geraci wrote in a post on Monday
This would make the 21Shares fund the primary XRP exchange-traded product and the fourth altcoin ETP launched under the 1933 law. The spot Bitcoin and Ether ETFs were also approved under the identical framework but are listed under the Securities Exchange Act of 1934, which requires stock market regulators.
At least 16 crypto ETF applications are currently awaiting approval, delayed by the federal government shutdown within the US, which is now in its fortieth day.
