The U.S. government is facing a serious risk of shutting down this week, and markets may be underestimating the impact — especially on crypto.
Here’s the key issue: a shutdown forces the U.S. Treasury to rebuild its Treasury General Account (TGA). That process drains liquidity from financial markets, and crypto is usually the first asset class to feel the squeeze.
What happened last time?
• Over $200B in liquidity was pulled
• Altcoins suffered even deeper losses
Why this time could be worse:
• Market liquidity is already thin
• Investor confidence is fragile
• Volatility is elevated
Now add more pressure from:
• Ongoing stablecoin legislation uncertainty
• New tariff threats
• Japan reducing U.S. bond exposure
Bottom line: If a shutdown happens, crypto may drop first before any recovery begins. Capital preservation matters here.
