Will Bitcoin Make a Comeback? What Will Happen After the U.S. Government Reopens? Experts Weigh In
The US government reopening and a bipartisan proposal to regulate cryptocurrencies may signal a significant shift in the crypto market. Experts note that the end of the government shutdown could restore economic stability, reduce macroeconomic uncertainty, increase institutional investor confidence, and inject liquidity back into the market. The shutdown had previously caused volatility, led investors to safer assets, and decreased liquidity. Additionally, a US Senate bill aims to create clearer regulations by transferring oversight of non-securities cryptocurrency trading to the CFTC while keeping investment-grade digital assets under SEC supervision. These developments are expected to bring greater transparency, stability, and predictability to the crypto market, fostering growth and innovation.
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Government Reopening Sparks Optimism
The reopening of the government in the US and the bipartisan proposal to regulate cryptocurrencies could mark the beginning of a new era in the crypto markets. Gracie Chen, CEO of crypto exchange Bitget, remarked, "The US Senate’s decision to end the government shutdown is a critical step in restoring economic stability."
Impact of the Lockdown on the Crypto Market
Technobit CEO Alexander Peresichan noted that the lockdown created uncertainty in the crypto market and caused investors to exit risky assets. According to Peresichan:
"The closure of public institutions, delayed macroeconomic data releases, and weakened confidence in US financial stability led to increased volatility and investors turning to safer instruments like the dollar, gold, and Treasury bonds. During this period, liquidity in the crypto market decreased, and the prices of many major cryptocurrencies, including Bitcoin, temporarily declined due to investor caution."
Significance of Political Stability
Experts believe that the end of political uncertainty could boost institutional investor confidence and re-inject significant liquidity into the market. Bitget CEO Gracie Chen commented:
"As macroeconomic uncertainty eases, institutional confidence will strengthen, and we will see a significant capital inflow from traditional financial participants. This could propel the market into an upward trend towards the end of the year, increasing trading volumes, price stability, and overall market activity."
Bipartisan Cryptocurrency Regulation Bill
In addition to the government reopening, a bipartisan bill in the US Senate aimed at establishing a clear framework for the cryptocurrency market is reportedly having a positive impact. The bill proposes to:
- Transfer oversight of spot trading of non-securities cryptocurrencies to the Commodity Futures Trading Commission (CFTC)
- Keep investment-grade digital assets under the supervision of the SEC
This move aims to resolve jurisdictional confusion between the two institutions and create a more transparent regulatory environment for both exchanges and investors.
Towards a Predictable Digital Asset Market
Chen argued that all these developments “herald a more predictable and reliable digital asset market that supports innovation without stifling growth.”