Will the US government shut down again by the end of January next year? The Democratic Party holds the deadline card, and the crypto bill's review is full of uncertainties.

US Budget Negotiations Stall, Government May Shut Down Again by End of January. Democratic Control of Funding Leverages Delays in Crypto Legislation Review.

Will the US Government Shut Down Again by End of January? Budget Negotiation Deadlock

During the US Congress’s Christmas recess, the budget dispute between Democrats and Republicans continues to escalate. Multiple foreign media reports indicate that Senate Democrats have taken a tough stance against a series of recent measures by Trump, hinting at the possibility of triggering another government shutdown crisis by the end of January.

Prior to this, Senate Democrats withdrew a broad budget agreement covering areas such as the Department of Defense, Labor, Education, and Health and Public Services, which originally involved about two-thirds of federal spending.

However, due to the inability to reach a consensus, Congress adjourned without passing critical funding bills, making the January 30 deadline for government funding the next focal point of political negotiations.

Democrats Hold the Deadline Card, Multiple Demands as Bargaining Chips

The main reason for the breakdown in negotiations is the White House’s attempt to cut funding for climate research agencies. According to The Hill, Democrats accuse the Trump administration of threatening to dissolve the National Center for Atmospheric Research (NCAR) in Boulder, Colorado, which is federally funded. This threat prevented Congress from advancing a five-bill budget package before Christmas.

Had the bill passed the Senate last week, it would have funded most federal agencies through September 2026 and eliminated the risk of another government shutdown.

Image source: Wiki Free Image Library, White House

The risk of a government shutdown still exists, and Democrats have not disclosed specific strategies before the January 30 deadline.

However, The Hill’s analysis suggests that Senate Democrats’ progressives may use the funding deadline as leverage to demand significant concessions from Trump.

The Democrats’ list of demands includes: guaranteeing that the Trump administration will not go to war with Venezuela, making all non-confidential documents related to Jeffrey Epstein’s sex abuse case public, and extending healthcare premium subsidies that are set to expire at the end of the year.

The last US government shutdown lasted 43 days, Bitcoin initially rose then weakened

The previous government shutdown in the US ended not long ago. It lasted 43 days, setting a record for the longest shutdown in history.

At that time, some market analysts expected the shutdown to be bullish for cryptocurrencies. However, actual data showed that Bitcoin’s price did not benefit.

During the more than a month-long shutdown, Bitcoin initially surged briefly but then declined, ending around $104,000, which was lower than before the shutdown.

Image source: CoinMarketCap, Last US government shutdown lasted 43 days, Bitcoin initially rose then weakened

Budget Disputes May Disrupt Agenda, Crypto Legislation Review at Risk

If the US government faces another shutdown crisis in January, the first casualty will be the progress of cryptocurrency regulation bills.

Japanese media CoinPost analyzed that if the government shuts down, Congress will have to refocus all efforts on the budget agreement, which will delay the review of the Digital Asset Market Clarity Act (Clarity Act), a key piece of legislation for the crypto industry.

The Clarity Act aims to establish standards for classifying cryptocurrencies as securities or commodities and clarify the jurisdiction of the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It was passed by the House of Representatives as early as July this year.

Although AI crypto czar David Sacks revealed on December 19 that the bill is expected to enter Senate review in January, if the budget deadlock persists, this long-anticipated regulatory clarity bill may face further delays.

Further reading:
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