Trump says shutdown deal near, but markets remain on edge

US Senate leaders and the White House say they have reached a bipartisan framework to avert a partial United States government shutdown, but the agreement still needs to clear key votes in Congress before funding actually expires.

Negotiations had stalled over funding for the Department of Homeland Security and immigration enforcement, with the current stopgap spending bill set to lapse Friday at midnight Eastern Time, leaving lawmakers racing to finalize and vote on the package before the deadline.

On Thursday evening, President Donald Trump stated that the “only thing” that could slow down the country was “another long and damaging Government Shutdown.” He said that he was “working hard with Congress” to secure the necessary funding.

The emerging deal may ease some immediate fears of a prolonged funding lapse after a week in which Bitcoin plunged to around $81,000, and spot Bitcoin ($BTC) and Ether (ETH) exchange-traded funds (ETFs) saw around $1 billion in outflows so far.

Broader risk assets also swung on a mix of Federal Reserve, shutdown and geopolitical headlines, while “safe haven” and industrial commodities such as gold, silver and oil also saw sharp price moves as investors repositioned, Reuters reported.

TGA expands ahead of possible spending pause

Nick Heather, head of trading at One.io, told Cointelegraph that Bitcoins drop reflected “tightening liquidity conditions” rather than crypto-specific weakness.

He said that “Bitcoins move down to the low-$80,000s looks far more like a liquidity-driven adjustment than a loss of conviction in the asset itself.”

On Friday, BitMEX co‑founder Arthur Hayes pointed to a roughly $300 billion drop in US dollar liquidity in recent weeks, driven largely by a rise in the Treasury General Account (TGA), arguing that the government may be raising cash balances ahead of possible spending disruptions and that Bitcoins decline was consistent with tighter dollar conditions.

Heather said that when the US Treasury rebuilds its cash balance, “risk assets tend to come under pressure, and crypto is often one of the first to react.”

However, from his internal onchain monitoring, he said that “whale wallets remain largely inactive, indicating that larger holders have not yet started accumulating and reinforcing the view that current moves are liquidity-driven rather than conviction-led.”

Geopolitics keep markets on edge

Investor nerves remained frayed on Friday, after Trump declared a national emergency over Cuba, and signaled Wednesday that he was weighing military options against Irans nuclear and missile programs, keeping geopolitical risk firmly in focus.

Precious metals, which had surged to record levels earlier in January, have sold off sharply, with silver “officially” entering “bear market territory,” according to The Kobeissi Letter, down 22% from its high, and gold briefly tumbling below $5,000 an ounce before recovering to around $5,100 at the time of writing, according to TradingView.

Past shutdowns and Bitcoins performance

Episodes of prior government shutdowns typically dent business and consumer confidence, delay key economic statistics, and raise questions about the US fiscal outlook, often translating into higher volatility across equities, bonds, the dollar and crypto.

Heather said, historically, government shutdowns create uncertainty rather than direction, and that for Bitcoin, “the immediate impact is usually higher volatility, not a clean trend.”

Even if a shutdown is avoided, traders were still dealing with tightening financial conditions and elevated geopolitical risk, Heather said.

“Until theres clearer visibility on liquidity and policy, both traditional and digital asset markets are likely to remain sensitive to headlines and prone to abrupt repricing.”