The longest government shutdown in U.S. history has ended: which encryption regulatory processes are about to restart?

On November 12, 2025, U.S. President Trump officially signed the budget bill passed by Congress, ending the longest government shutdown in U.S. history, which lasted 43 days. This crisis led to the suspension of federal contracts, interruptions in food assistance payments, and the cancellation of more than 2,500 flights nationwide, with key economic data collection completely halted. As regulatory agencies such as the SEC and CFTC resume normal operations, the backlog of encryption ETF applications and the formulation of regulatory rules will accelerate. However, the Fed still faces an information blind spot for the December interest rate decision due to the lack of employment and inflation data for October.

Impact of Government Shutdown and Recovery Process

The record government shutdown has had widespread impacts on the U.S. economy and social operations. Federal contractors have suffered significant losses, Native American tribes have had to take emergency measures to cope with food assistance interruptions, and college students relying on federal grants are turning to campus support services. The aviation transportation system has been particularly affected, with air traffic controller shortages leading to thousands of flight cancellations. Although the Federal Aviation Administration has worked to maintain basic operations, the stability of the system is under severe test.

Key Impact Data of Government Shutdown

Duration: 43 days (longest in history)

Flight cancellations: 2500 flights

Federal employees: About 800,000 affected

Data gap: October employment and inflation reports missing

Regulatory Delay: SEC and CFTC Rulemaking Paused

The recovery process has already been initiated, but the impacts will continue to manifest. Federal agencies are gradually returning to normal operations; however, the absence of key economic data presents unique challenges for policymakers. The employment report and consumer price index report for October, which the U.S. Department of Labor was supposed to release during the shutdown, were not published as scheduled. The lack of this data has left the Fed in an information vacuum ahead of the crucial monetary policy meeting in December.

The Data Dilemma of Fed Policy Decisions

The lack of the latest economic data forces the Fed to rely on lagging indicators and alternative data sources for decision analysis. This uncertainty environment increases the complexity of the December Intrerest Rate decision, with the market generally expecting the Fed to take a cautious approach, possibly leaning towards maintaining or further lowering rates to support economic growth and employment. Although the government has now restarted, the recovery of data collection efforts will take time, and a complete economic picture may not be reestablished until early 2026.

Historically, government shutdowns have disrupted economic data, leading to risks of policy misjudgment. After the shutdown ended in 2013, revised data showed that the actual economic performance was much better than the estimates made during the shutdown. Similar risks in the current environment may affect the Fed's judgment of economic health, particularly in assessing the inflation path and the tightness of the labor market.

The Restart of Encryption Regulation Process and Market Impact

The resumption of normal operations by key regulatory agencies such as the SEC and CFTC has a direct positive impact on the digital asset market. The backlog of ETF applications, rule-making, and enforcement actions that accumulated during the shutdown will be expedited, including the approval process for several spot Ethereum ETFs and emerging encryption asset ETPs. The Senate Agriculture Committee's discussion draft on authorizing the CFTC to regulate the spot encryption market is also expected to move forward more quickly.

Upcoming Restart of Encryption Regulatory Matters

ETF Approval: Multiple spot Ethereum ETFs pending approval

Rule-making: Classification and Custody Standards for Digital Assets

Law enforcement action: Resumption of hearing in pending investigation cases.

Legislative support: The GENIUS Act and other legislative processes are accelerating.

The confirmation hearing for the nomination of the chairman of the Commodity Futures Trading Commission and other key personnel procedures will also return to normal, which is crucial for the coherence of digital asset regulatory policies. At the same time, the resumption of normal operations by institutions such as the IRS and the Office of the Comptroller of the Currency will promote clearer tax guidance and regulatory certainty for banks participating in encryption businesses.

Legislative Progress and Long-term Solutions

The budget bill underwent intense debate in Congress. Democratic leaders opposed the provisions in the bill that cut funding for Medicaid and Medicare, arguing that it would threaten affordable healthcare. Nonetheless, the compromise reached by House Speaker Mike Johnson ultimately garnered enough bipartisan support, and the Senate passed the bill with a 60-40 vote.

However, whether this agreement can prevent future government shutdowns remains in question. The deep structural issues in the budgeting process and the fundamental disagreements between the two parties on spending priorities have not been resolved. Congress will face a new round of budget negotiations in the coming weeks, and the allocation of funds for the fiscal year 2026 will continue to be the focal point of political games.

Economic Recovery Path and Market Outlook

The economic recovery after the government's restart is expected to show uneven characteristics. Federal employees and contractors will quickly receive back pay, but small businesses and those reliant on government services may take longer to recover. The normalization process for air travel is relatively optimistic, with expectations to return to pre-shutdown levels in the next 2-3 weeks.

The return of regulatory certainty is a positive signal for the digital asset market. After SEC staff resumed full-time work, the processing speed of the backlog of ETF applications may accelerate, providing new channels for capital inflows into the market. At the same time, the CFTC's potential expansion of regulatory authority over the cryptocurrency spot market may create a more favorable environment for institutional participation.

Systemic Risk and Institutional Resilience Assessment

This record-breaking shutdown event has sparked an in-depth reflection on the resilience of the U.S. governance system. The vulnerabilities in key economic data collection systems, the loopholes in basic service maintenance mechanisms, and the threats posed by political deadlock to economic stability all indicate that institutional reforms may be necessary in the future to prevent similar crises from recurring.

For global investors, the uncertainty premium of the U.S. policymaking process may rise permanently. Digital assets, as a relatively emerging asset class, are particularly sensitive to this political risk, but they may also partially evade the vulnerabilities of the traditional financial system due to their decentralized nature. In the long run, this crisis may accelerate the migration of capital towards more resilient financial infrastructure.