US Government Shutdown in January Risk Hits 38% Amid Budget Deadlock

The risk of another U.S. government shutdown is climbing as Congress left Washington for the Christmas recess without finalizing a budget deal or setting a clear path forward. With the January 31 funding deadline fast approaching, uncertainty is growing around federal operations, markets, and broader economic stability.

Adding to the concern, Polymarket data now shows a 38% chance of a U.S. government shutdown, signaling rising public and market anxiety over stalled funding talks.

Budget Talks Stall as Lawmakers Leave Town

According to reports, Senate leaders abandoned efforts to pass a funding package before lawmakers departed for the holidays. Weeks of negotiations failed to break internal resistance within committees or secure enough votes to move legislation forward. As a result, Congress left town with no deal and no clear voting framework in place.

Lawmakers still need to pass nine remaining spending bills, but negotiations remain stuck. While top House and Senate appropriators agreed on overall spending caps, the deal only outlined high-level numbers and failed to resolve disputes over how funds should be allocated across federal agencies.

Democrats have expressed frustration, arguing that months were wasted drafting partisan bills instead of negotiating. They say they are ready to proceed under the agreed spending limits. Republicans, however, remain divided, with fiscal conservatives pushing for flat funding and warning they will oppose any bill that increases spending.

Time Pressure Raises Shutdown Risk

The calendar is working against Congress. When lawmakers return on January 5, they will have only about three working weeks before the January 31 deadline. The House is scheduled to be out for one of those weeks, further compressing the timeline.

Some lawmakers now openly acknowledge that another short-term continuing resolution (CR) may be the most realistic option. Others warn that failure to act could result in a shutdown with little time to respond once the deadline hits.

• Also Read :
•   Why Are Bitcoin, Ethereum, and XRP Prices Going Down Today?
• ,

NO DEAL = NO FUNDING: Is This Bad News for Crypto?

A government shutdown typically creates short-term uncertainty rather than outright market panic. Past shutdowns have disrupted economic data releases, delayed regulatory decisions, and added strain to already fragile macro conditions.

For crypto, the impact can cut both ways. Risk assets may see volatility as investors turn cautious. At the same time, political gridlock often weakens confidence in traditional systems, reinforcing Bitcoin’s narrative as a hedge against government dysfunction. In that sense, short-term noise could strengthen crypto’s long-term appeal.

Political Fallout and Market Sentiment

Crypto investor Steve Ferguson sharply criticized Republicans, noting that despite years of promises to pass 12 separate spending bills, not a single one has been produced. He warned that Congress is now headed toward either another CR at current spending levels or a shutdown around January 30, adding that Republicans will “own” the outcome if funding fails.

Meanwhile, public frustration is boiling over. Reacting to the 38% shutdown odds, commentator Mila Joy called it an indictment of Washington’s dysfunction rather than a prediction, slamming Congress for repeatedly kicking the can down the road.

With funding talks stalled and time running out, the coming weeks will determine whether the U.S. avoids yet another government shutdown or slides into one again.

FAQs