The US government is going to shut down again, will it be even more severe this time than last year? Just saw the data on Polymarket: The probability of a US government shutdown this Saturday has risen to 80%. It's been less than three days now. To be honest, I have a bit of a bad feeling in my heart. There is a high probability of a significant fluctuation in the market this Saturday. After all, we have already experienced a complete government shutdown last year. I still remember how excited the market was on the day when the government reopened. For assets such as encryption that are highly dependent on liquidity and narrative, The four words' government shutdown 'are themselves a bomb. The problem is: Will the cryptocurrency market fall more severely this time than last year? To answer this question, we need to first clarify one thing: Why is the government shutting down again this time? 1、 This time it's not a matter of money, it's a complete political upheaval On the surface, it appears that the funding bill has not been passed. But the real source is in Minnesota. During the pandemic, the United States relaxed its regulatory rules for "free children's lunches": No need for children to be present No need to call by name How much does the non-profit organization report, and how much does the government give No upper limit As a result, in Minnesota, it was played as an ATM. Later investigation found that: Involving 14 public projects The total amount is as high as 18 billion US dollars About 9 billion of them belong to systematic fraud This is one of the largest welfare fraud cases in American history. More sensitive is: Of the 92 defendants, 82 are Somali immigrants Minnesota is the Democratic Party's iron fisted stronghold Many organizations involved in the case have deep connections with local political networks This matter was quickly labeled with three tags: Welfare, immigration, and corruption. Trump and Musk continue to repost relevant content. The Republican Party uses it as a campaign weapon. Subsequently, federal law enforcement was upgraded, ICE has become the main force. Things are starting to lose their flavor. 2、 What really ignited the situation were two gunshots On January 7th, a woman was shot dead during ICE enforcement. On January 24th, another American citizen, Alex Pretti, was mistakenly killed. Massive protests erupted in Minnesota, The National Guard entered to maintain order. The attitude of the Democratic Party immediately became tough: ICE has lost control and it is impossible to allocate funds to it before the reform. The Republican Party's attitude is equally tough: It is precisely because of the severity of welfare fraud and illegal immigration that ICE is needed even more. So, the budget of the Department of Homeland Security was stuck. Originally it was just a financial issue, Forced into: Immigration policy+welfare system+public safety+election narrative. This is no longer a technical negotiation, But rather a clash of positions. 3、 Why can it keep dragging on? Because the system already allows procrastination The US Senate has a key rule: The appropriation bill requires 60 votes to pass. The current seat is: Republican Party 53 Democratic Party and Allies 47 As long as the Democratic Party collectively obstructs, The Republican Party will never survive. So this is not 'unable to reach an agreement', But as long as you don't think about it, you can definitely get stuck. There are only a few working days left until the deadline of January 30th. That's also why the probability of Polymarket has skyrocketed from over ten% to 80% 4、 Will this time be more ruthless than last year? I don't think so Last October, there was a complete shutdown. Lasted for 43 days, setting a record. The entire budget system is malfunctioning together. And this time: 12 appropriation bills have been passed, and 6 of them have been approved Even if the shutdown occurs, it is highly likely to be a 'partial shutdown' Mainly concentrated in a few departments let me put it another way: This is a local cramp, not a systemic paralysis. And the market has long known about this risk. The recent weakness in the cryptocurrency industry is already digesting some expectations of a shutdown. So my judgment is: The impact strength is likely to be lower than last year's round. 5、 What really makes the cryptocurrency industry uncomfortable is that the narrative will be paused If it only falls for a few days, the market has already become accustomed to it. Even more troublesome is the institutional level. Clarity Act, It is likely to be further delayed. The core significance of this bill is: Are digital assets securities or commodities The SEC and the CFTC, who is in charge the final say Provide the institution with a compliance anchor point It has already been passed in the House of Representatives, The original plan was to enter the Senate in January. Once the government falls into a shutdown: All congressional energy is focused on 'don't close the door' All bills with complex technology and cross party coordination are placed at the back This won't immediately smash the plate, But it will make institutional funds more hesitant, Make the knockoff even more storytelling. 6、 From a trading perspective, we need to focus on two lines Article 1: Probability curve of Polymarket. Falling from 80% to 40% → Risk assets take a breath Rush to 90% and maintain → Take risks ahead of time Article 2: The US dollar and short-term interest rates. As long as funds move towards safe haven, The cryptocurrency industry cannot be isolated. 7、 This matter is no longer essentially a budget issue Why is there a welfare fraud case, Can it push all the way to the government shutdown? Because American politics has long been more than just 'how to divide money', But who does the system trust. ICE、 Medical insurance subsidies and welfare system, These are the real problems that voters face every day. When these issues become weapons of party struggle, The government shutdown is no longer an accident, But rather a game tool. in other words This is likely a battlefield set up in advance for the midterm elections. 8、 Conclusion Overall, if the US government really shuts down this time, The negative impact on the market is unlikely to be as significant as last year. The reason is simple: Firstly, this is more likely to be a partial shutdown rather than a complete shutdown. The intensity is completely different from last year. Secondly, the market is already aware of the risks in advance. An 80% probability indicates that the expectation has already been traded once. The truly dangerous thing is' unexpected events'. Thirdly, what is lacking this time is narrative, not liquidity. In the short term, it can disrupt emotions, But it will not create new systemic risks. So a more accurate judgment is: This shutdown, for the cryptocurrency industry: I can't say it's a good thing, But it's also difficult to consider it a big negative. The short-term impact is more like: mood swings Decreased risk appetite Shanzhai is weaker, mainstream coins are under pressure instead of: Systemic collapse Liquidity fault Last year's comprehensive impact The real impact is in the mid-term: Once the government enters a state of shutdown, The Clarity Act and other encryption legislation will be postponed. This won't immediately smash the plate, But it will make institutions more hesitant, Let the market have one less new story to tell.