Imagine the gears of the US government getting so jammed that even the Securities and Exchange Commission can’t approve crypto ETFs. And the shutdown is dragging on like a bad hangover, well past 40 days.
That’s exactly the chaos brewing in Washington, as a historic funding lapse puts a wrench in the crypto ETF approval process, sending investors into a frenzy.
Stuck in limbo
The US government’s longest-ever shutdown has slashed federal agency staff to bare bones, leaving the SEC scrambling to keep up.
Market forecasters throw around a 55% chance this shutdown will drag even longer, meaning regulatory reviews sit idle while anxiously waiting asset managers tap their fingers.
Quick approvals? Forget it. The SEC’s crypto ETF green lights, think staked Ethereum and XRP, are stuck in limbo, waiting for daylight when the government clock finally starts ticking again.
Newly approved crypto funds
Yet, investors aren’t cooling off. Quite the opposite. Experts say data from Charles Schwab shows their clients control about 20% of US crypto ETF assets under custody, and visits to crypto info webs have blasted up nearly 90% annualized.
Demand is boiling over even while regulators play freeze tag.
So what’s this impasse mean for the markets? Analysts believe the delay is more like a time warp than a death sentence for approvals, once the shutdown ends, a tidal wave of pent-up interest could flood newly approved crypto funds.
But don’t hold your breath for fireworks, some capital is glued to the sidelines, while other investors have already jumped ship seeking other thrills.
Denial
They say the backlog awaiting SEC staff post-shutdown might spark a rapid fire approval blitz.
Paper stacks could get shuffled to top priority as issuers push for fast-track decisions, potentially unleashing a sudden jump of funds straight into those long-awaited ETFs.
Of course, this shutdown isn’t the SEC’s only headache. Approvals hinge on complex legal debates, market structure considerations, and compliance hurdles.
Stretched staffing delays the paperwork but doesn’t rewrite the rulebook, meaning some crypto products could still face denial or tough conditions.
💬 Editor’s Take:
It’s almost absurd — a trillion-dollar market waiting on a few signatures that can’t happen because Washington’s lights are off.
The longer this shutdown drags on, the tighter the coil of pent-up demand becomes. When the SEC finally gets back to work, expect a floodgate moment, not a drizzle.
But let’s be honest, this mess is another reminder that crypto’s fate is still chained to old-world bureaucracy. The irony writes itself.
Cryptocurrency and Web3 expert, founder of Kriptoworld
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With years of experience covering the blockchain space, András delivers insightful reporting on DeFi, tokenization, altcoins, and crypto regulations shaping the digital economy.
