Bitcoin News Today: Bitcoin Surges as SEC Shutdown Halts Crypto Rulemaking and ETF Approvals

The U.S. federal government shutdown, which began on September 30, 2025, has triggered a regulatory freeze at the Securities and Exchange Commission (SEC), halting key operations and delaying critical decisions in the cryptocurrency sector. With the SEC operating under a contingency plan that limits its workforce to essential staff, the agency is unable to review registration applications, approve new crypto exchange-traded products (ETPs), or advance rulemaking on stablecoins and other crypto-related frameworks. This operational pause has created uncertainty for market participants, particularly as pending approvals for Ethereum and Solana ETFs face indefinite delaystitle9^[9].

The shutdown has also amplified a risk-off sentiment in global markets, with Bitcoin rallying to within 1% of its all-time high of $124,400. Traders and investors are increasingly viewing Bitcoin as a safe-haven asset amid political instability, with the cryptocurrency surging 12% in the week leading to October 3title5^[5]. Standard Chartered analysts note that Bitcoin's performance during the shutdown contrasts with its behavior during the 2018-2019 shutdown, when the asset was in a bearish phase. This time, Bitcoin's correlation with U.S. treasury term premiums highlights its role as a hedge against government risktitle5^[5].

The SEC's limited capacity has further stoked concerns about the timeline for regulatory clarity. The agency's electronic filing system (EDGAR) remains operational, but the absence of active reviews means crypto firms seeking approvals for ETFs or broker-dealer status face prolonged delays. For example, Solana spot ETF proposals-expected to be approved by mid-October-now face a potential delay into early 2026title9^[9]. Analysts warn that such setbacks could deter institutional inflows, with Bloomberg's Eric Balchunas estimating that delayed approvals might cost the industry billions in lost investmenttitle8^[8].

The shutdown has also disrupted enforcement actions against crypto exchanges. While emergency cases remain active, non-essential litigation, including ongoing probes into platforms like Binance and Coinbase, has been pausedtitle9^[9]. This temporary reprieve has been interpreted by some as a strategic advantage for crypto firms, though critics argue that the lack of regulatory oversight could exacerbate market uncertainty. Kristin Smith of the Blockchain Association emphasized the need for "regulatory certainty" to sustain crypto's growth trajectorytitle8^[8].

Market participants are closely monitoring the SEC's contingency operations, which prioritize securing systems and preparing for a rapid restart once funding resumes. The agency's plan, outlined in an August 2025 update, mandates that non-essential staff secure workstations and suspend reviews, effectively freezing the regulatory pipelinetitle8^[8]. With only 10% of the SEC's 4,500 employees active, the agency's ability to address crypto-related rulemaking-such as the GENIUS Act's stablecoin framework-has been severely curtailedtitle8^[8].

The broader economic implications of the shutdown remain uncertain. While short-term inflows into Bitcoin suggest a flight to quality, the prolonged absence of regulatory clarity could dampen long-term investor confidence. TD Cowen analysts have highlighted the risk of a "regulatory blackout" delaying market structure innovations, including Ethereum staking ETFs and cross-chain productstitle1^[1]. Meanwhile, the crypto Fear & Greed Index, currently at 71 ("Greed"), reflects heightened speculative activity, though analysts caution that volatility could intensify if the shutdown extends beyond a few weekstitle7^[7].

As lawmakers remain deadlocked over a funding bill, the SEC's operations are expected to remain in limbo until a resolution is reached. House Speaker Mike Johnson has indicated the chamber will reconvene next week, but Democrats have refused to accept the Republican-backed budget without reversing healthcare cuts. This impasse underscores the fragility of the U.S. regulatory environment for crypto, where policy delays could ripple into global markets. For now, the sector is navigating a dual narrative: a short-term rally driven by risk-off sentiment and a long-term pause in regulatory progress that could reshape its growth trajectory.