No Inflation Data, No Confidence: When Will the Crypto Market Recover its Lost $408 Billion?

The U.S. government shutdown introduced macroeconomic uncertainty that directly affected the cryptocurrency market's expansion. The 40-day halt raised concerns about global volatility and delayed regulatory advancements, including the approval processes for ETFs. Without official economic data on inflation and employment figures, the Federal Reserve faced challenges in establishing monetary policy, which increased investor caution across financial markets.

Between October 1 and November 10, the cryptocurrency market's growth rate significantly slowed. This flattening resulted in an aggregate market cap loss of $408 billion, according to CryptoQuant’s Market Cap Comparison indicator.

• Bitcoin's growth rate dropped from 16.75% on October 1 to 6.60% on November 10.
• Top 20 assets excluding BTC declined from 32.29% to 14.67% in the same period.
• Mid and small-cap assets saw the most drastic contraction, with growth rates plunging from 18.57% on October 1 to just 0.21% on November 10.

The shutdown's negative effects were amplified by a deleveraging event on October 10, 2025. President Trump's proposed 100% tariffs on Chinese goods triggered a massive market liquidation. This event caused liquidations totaling $19.37 billion across 1.6 million traders, marking the largest liquidation event in cryptocurrency history.

Additionally, the shutdown contributed to a liquidity drain in overnight funding markets. According to Peter Chung, head of research at Presto Research, "The prolonged shutdown had the effect of draining liquidity in the overnight funding market, contributing to market jitters over the last few weeks."

The liquidity squeeze occurred while the market was still recovering from the October 10 crash, compounding the damage and slowing recovery.

• Smaller market segments faced heightened risk aversion, particularly due to the absence of macroeconomic data and the postponement of key legislation.
• While Bitcoin managed to maintain elevated price levels, the market exhibited vulnerability to political and regulatory uncertainty.

The resumption of government activity and the release of economic indicators are expected to play a critical role in restoring investor confidence and promoting sector growth.

The lack of inflation data hindered the Federal Reserve's ability to make informed decisions about interest rates and monetary policy, which in turn discouraged institutional capital deployment into cryptocurrency markets.

Analysts suggest that the restoration of government data releases, particularly inflation and employment figures, will provide a foundation for renewed investor confidence. Additionally, the resumption of regulatory processes, including ETF approvals, could catalyze institutional inflows, supporting market cap recovery and fostering consistent growth.

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