XRP News Today: Shutdown Risk Paralyzes Crypto Regulations, Sparking Sell-Off

The U.S. government shutdown risk has intensified, with prediction markets pricing a 77% probability of a shutdown by December 31, 2025, and 63% by October 1, according to Polymarket datatitle1^[1]. This uncertainty has triggered a risk-averse sentiment in crypto markets, with major cryptocurrencies like Ethereum (ETH), Bitcoin (BTC), and XRP experiencing significant price declines. ETH fell below $4,000, BTC dropped to under $112,000, and XRP traded at $2.78, reflecting a 2% decline in the CoinDesk 20 Indextitle2^[2]. Analysts attribute the selloff to fears of regulatory delays, economic instability, and reduced liquidity in the event of a prolonged shutdown.

The potential shutdown could disrupt regulatory processes, particularly for the Securities and Exchange Commission (SEC). A temporary halt in SEC operations would delay approvals for crypto exchange-traded products (ETPs), including spot ETFs for Solana, XRP, and Ethereum staking. This could stall market enthusiasm and price momentum, as seen with six firms, including Grayscale and 21Shares, awaiting October deadlines for XRP ETF filingstitle3^[3]. Ripple's pursuit of a U.S. national bank charter, which relies on reviews by the Office of the Comptroller of the Currency (OCC), may also face delays, further complicating its U.S. expansion strategytitle4^[4].

Market participants are also concerned about the broader economic implications. A government shutdown could slow data releases and financial operations, exacerbating macroeconomic uncertainty. This risk-off environment has amplified selling pressure on higher-risk assets like cryptocurrencies. For instance, XRP's price has traded in a narrow range under $3 for a month, despite institutional interest, while technical indicators suggest whale accumulation of 120 million XRP in the past 72 hourstitle5^[5]. However, analysts caution that a reversal in investor sentiment toward risk-on assets could occur if the shutdown is averted or if inflation data signals room for further Federal Reserve rate cuts.

The Federal Reserve's cautious approach to rate cuts has added to market volatility. While the Fed cut rates by 25 basis points on September 17, policymakers, including Chair Jerome Powell, have emphasized data-dependent decisions. Traders await Friday's PCE inflation data, which could influence liquidity conditions in Q4. QCP Capital noted that contained inflation pressures might justify further Fed cuts, potentially aiding BTC's long-anticipated breakouttitle6^[6]. Meanwhile, the upcoming $23 billion Bitcoin and ETH options expiry this week has heightened market tension, with over $1.65 billion in leveraged positions liquidated recentlytitle7^[7].

Despite short-term volatility, long-term crypto fundamentals remain intact. Innovations in blockchain technology and institutional adoption continue to underpin the market. However, investors are advised to monitor key developments, including the October 1 fiscal deadline and regulatory updates. If the government avoids a shutdown and economic data aligns with expectations, risk appetite could return, supporting a recovery in crypto pricestitle8^[8]. For now, the sector faces a test of resilience amid overlapping macroeconomic and political uncertainties.