Thahbib Rahman
Research Analyst
Last Updated:
October 1, 2025
•
8 min read
Government Shutdown
At 4AM UTC, the US government entered shutdown after Congress failed to pass a funding bill, putting around 750,000 federal employees at risk of furloughs and threatening key data releases like Friday’s jobs report. Markets reacted with S&P 500 and Nasdaq-100 futures down ~0.8–1%, though crypto markets diverged — BTC climbed past $116K and ETH reclaimed $4,300 despite volatility swings in ETH skew. Bloomberg Economics warned that a shutdown lasting beyond three weeks could push unemployment to 4.6–4.7% from 4.3%. Meanwhile, Fed officials struck mixed tones: Boston’s Collins signaled scope for further rate cuts, while Dallas’s Logan cautioned against easing given sticky services inflation. Separately, Metaplanet boosted its holdings to 30,823 BTC, becoming the fourth-largest public holder after a $623M purchase at ~$118K per coin.
Find out our latest reports, listed below:
Market Snapshot: Overnight Moves:
Daily Updates:
- At 4AM UTC today (midnight in Washington), the US government shut down after Republicans and Democrats in Congress failed to find a middle ground on an agreement to fund the federal government into the new fiscal year.
- The last government shutdown occurred in 2018, also under President Trump, when his request for nearly $6B in border wall funding resulted in a record-long 35 day impasse between the two parties.
- The White House’s budget office sent out a statement to agencies to begin executing the plans that were set out last Wednesday in the event of a funding lapse. Last week’s statement directed federal agencies to begin planning permanent layoffs of federal workers in programs that do not align with the Trump administration’s policies. According to The Congressional Budget Office, roughly 750,000 federal employees could be furloughed each day of a shutdown.
- Bloomberg Economics stated that should the shutdown persist beyond three weeks, the unemployment rate could spike to 4.6%-4.7% from the 4.3% in August, as furloughed federal workers are counted as temporarily unemployed.
- When asked about the number of government employees that could be dismissed in a shutdown, President Trump responded “We may do a lot and that’s only because of the Democrats”.
- As we stated earlier this week, the government shutdown now poses a threat to the release of the Bureau of Labor Statistics nonfarm payrolls jobs report for Friday — that report is a key data release for policymakers at the Fed who meet at the end of the month.
- US equity futures fell following the news — contracts on the S&P 500 dropped by 0.8%, while Nasdaq-100 futures declined by just under a full percentage point.
- BTC and crypto-assets have shown a far smaller inclination to respond to the event however.
- In the immediate aftermath of the shutdown, Ether traded between $4,100 and $4,200, while BTC equally ranged sideways at $114K. Since then, over the past two hours, crypto asset spot prices have all moved vertically higher — BTC is now trading past $116K, while Ether has reclaimed $4,300.
- A slight divergence has played out in skew levels over the past 24 hours between the two assets however. ETH volatility smiles plunged from near neutral levels to a 12% skew tilted towards puts in the two hours ahead of the government shutdown. That was then followed by a large reversal that now means 7-day smiles are skewed only 1.6% towards OTM puts.
- Over the same period, skew in BTC options has traded sideways and continues to remain in favour of puts.
- At a New York event yesterday, Boston Fed President Susan Collins said “My baseline outlook doesn’t see the labour market softening much further, but there are risks. In particular, I see some increased risk that labour demand may fall significantly short of supply, leading to a more meaningful and unwelcome increase in the unemployment rate”.
- The Boston President added that “with less scope for inflationary pressures from the labour market, the upside inflation risks I was concerned about a few months ago are more limited”. Those factors mean “It may be appropriate to ease the policy rate a bit further this year”.
- Collin’s Dallas President counterpart, Lorie Logan, echoed a more hawkish stance on monetary policy on the other hand, in a speech yesterday titled ‘Why I’ll be cautious about further rate cuts’.
- Logan said that “The combination of persistent inflation, resilient demand and modest labour market slack indicates to me that policy is likely only modestly restrictive”. Therefore, “There may be relatively little room to make additional rate cuts.”
- The Dallas President also said there are signs of other drivers beyond tariffs that are pushing inflation higher: “Most worrisome for the medium-term inflation outlook, non-housing services inflation should be relatively unaffected by tariffs, yet it has hovered near 3.4 percent over the past year. Non-housing services represents more than half of Americans’ aggregate consumption. My staff estimates that the current rate of inflation in this category is high enough to keep overall inflation above 2 percent by 30 to 40 basis points.”
- Metaplanet has become the world’s fourth-largest publicly traded bitcoin holder after purchasing 5,268 BTC, bringing its total holdings to 30,823 BTC. The acquisition, made at an average price of $118,328 per coin, follows a $632M purchase on Sept. 21.
- CEO Simon Gerovich highlighted that Q3 revenue rose 115.7% quarter-over-quarter to $16.5M, supporting the firm’s broader Bitcoin Treasury strategy.
This Week’s Calendar:
Charts of the Day:
Free
PREMIUM
Institutional
Short-tenor BTC Options Skew Towards Calls
Following a breakout past $120K, short-tenor BTC options which had shown a persistent skew towards put options in September now express a higher relative demand for calls over puts. That bullish positioning has yet to extend out to longer-dated options however, suggesting the newfound optimism isn’t spreading out to all of Q4 just yet. ETH options markets on the other hand continue to lean bearish, despite a bigger move in spot price and a week of strong Spot ETF inflows. Wall St financial markets operated in the dark amidst a data blackout given the US federal government shutdown, while President Trump's administration is weighing up a major slash to federal jobs. CME Group has announced an upcoming roll out of crypto futures and options “available to trade 24 hours a day, seven days a week” in early 2026, subject to regulatory approval.
Free
PREMIUM
Institutional
‘Uptober’
BTC and ETH kicked off “Uptober” with strong gains, up ~4% and ~6% respectively, supported by three straight days of inflows into spot ETFs ($270M BTC, $55M ETH). Options markets show fading bearish skew, with BTC and ETH 7-day smiles nearly neutral. The move aligned with a broader risk-on rally, as the S&P 500 hit fresh highs despite a prolonged U.S. government shutdown. Weak ADP payroll data (-32K vs. +51K expected) pushed Treasury yields lower (2Y ~3.55%, 10Y ~4.10%) and gold to a record $3,898/oz. On the structural side, tokenization dominated headlines: Trump-linked WLF unveiled debit cards and commodity tokenization, Telegram will enable tokenized equities via Kraken, and Sui Group plus Avalanche Treasury announced major stablecoin and treasury deals.
Free
PREMIUM
Institutional
Government Shutdown
At 4AM UTC, the US government entered shutdown after Congress failed to pass a funding bill, putting around 750,000 federal employees at risk of furloughs and threatening key data releases like Friday’s jobs report. Markets reacted with S&P 500 and Nasdaq-100 futures down ~0.8–1%, though crypto markets diverged — BTC climbed past $116K and ETH reclaimed $4,300 despite volatility swings in ETH skew. Bloomberg Economics warned that a shutdown lasting beyond three weeks could push unemployment to 4.6–4.7% from 4.3%. Meanwhile, Fed officials struck mixed tones: Boston’s Collins signaled scope for further rate cuts, while Dallas’s Logan cautioned against easing given sticky services inflation. Separately, Metaplanet boosted its holdings to 30,823 BTC, becoming the fourth-largest public holder after a $623M purchase at ~$118K per coin.