The Crypto Tides are Turning in Q4 | Capital Nexus - By Shepley Capital

When people talk about macro risks in crypto, most think inflation, interest rates, or regulations. But the next obstacle could come from something much more political: the looming U.S. Government shutdown.

What actually happens in a shutdown?

When the U.S. government fails to pass its budget in time, a shutdown is triggered. 

⚖ “Essential” federal workers; such as law enforcement & military still work, but without pay. 
🚫 “Non-essential” staff, accounting for over 100k employees across federal departments, are sent home without pay.

The last major shutdown happened in 2018/19, lasting 35 days, the longest in U.S. history. Right now the U.S is on day 5 of their government shutdown.

Why this matters for crypto…

Back in 2018/19, Bitcoin’s market cap was only a fraction of today, at less than 3% of its current size. With this said, there isn’t much reliable historic data to predict how the crypto market will react.

But here’s the pattern we expect:

In times of financial stress, people look for liquidity. Despite all the “digital gold” narratives, crypto is often the first asset sold when households need cash. That’s why we’d typically anticipate a short-term downtrend, in this case not because of chart patterns or technical analysis, but because of human behaviour under financial pressure. Keep in mind that this shutdown coincides with the projected October rally, so if the market continues running as we’ve seen over the past few days, sentiment around liquidating crypto shares may disappear before it even begins, leaving the door open for a bullish month.

It will all come down to where the volume sits. If the sellers rally in force, the majority market will follow. Likewise if the market continues to break through resistance levels relatively easily, the market will jump on the upward moving train.

Regardless of which way the market decides to move, we need to be prepared for the worst. These are the steps to take to ensure you’re positioned for any event.

How big of a hit could we see all depends on the following:
⏳ How long the shutdown lasts.
🏚️ How much financial stress builds up across households.
🏦 Whether institutional players step in to capitalise on struggling household sell-offs.

What investors should consider.

For short-term traders:
 🛡️ Tighten stop-losses.
🎯 Decide in advance if you’ll hold or de-risk early.
🧠 Don’t react emotionally after the move has already happened.

For long-term holders:

🚀 This isn’t your first rodeo. Ride out the bump like any other.
📉 Crypto has lived through worse; bear market sell-offs, regulatory crackdowns, institutional pressures.
💎 Remember this isn’t a reflection on crypto’s strength, but on the U.S. economy’s fragility.

And for us Australians…

🌏 From the outside looking in, this is another U.S. centric event with global ripple effects. For many international investors, this is an opportunity to accumulate more into our portfolio’s at a discount.