Government Shutdown Overview

The shutdown started earlier this week due to failed budget discussions between Republicans and Democrats. BBC News (October 8, 2025) points out that the controversy revolves around budget cuts and reversals of social programs initiated in President Donald Trump’s administration. This is one of more than 20 shutdowns since 1976. The 2018-2019 shutdown lasted 35 days and cost the economy an estimated $11 billion according to the Congressional Budget Office (CBO). Analysts warn that if Congress does not reach an agreement by October 15, the stalemate could extend beyond two weeks.

> UPDATE:
> Polymarket traders see an 83% chance the U.S. government shutdown lasts past Oct 15.

Economic Impact

Economists from The Conversation (October 2, 2025) estimate that each week of the shutdown costs the U.S. economy around $3 billion due to halted federal expenditures, delayed grants, and diminished consumer confidence. If the shutdown persists until October 15, estimated losses could reach $6 billion, increasing to $9-12 billion if it extends into November.

Polymarket has become a leading decentralized prediction market, using stablecoins (USDC) to assess trader sentiment. Historically, it shows 70-90% accuracy in major event forecasts, including the 2024 U.S. election. Current trading volume is reported at over $2 million, indicating rising investor interest. The 83% probability of the shutdown lasting past October 15 aligns with media reporting of stalled Congressional negotiations.

Market Response

The 2018-2019 shutdown led to 800,000 federal workers being furloughed and caused a 2.5% decline in the S&P 500 index along with an 8% drop in Bitcoin, highlighting the uncertainty this shutdown brings to both traditional and crypto markets. Analysts predict a similar outcome; if the shutdown continues past mid-October, U.S. equities might decline by 3-5%, with increased volatility expected in Bitcoin and Ethereum pairs.