- The crypto market lost $408 billion in value between October 1 and November 10.
- Bitcoin growth rate declined from to 6.60% during the 40-day government shutdown.
- Mid and small-cap assets experienced the most severe contraction, falling to 0.21%.
The U.S. government shutdown introduced macroeconomic uncertainty that directly affected cryptocurrency market expansion. The 40-day halt raised concerns about global volatility and delayed regulatory advancement, including ETF approval processes.
Without official economic data on inflation and employment figures, the Federal Reserve faced challenges in establishing monetary policy. This increased investor caution across financial markets. Despite historical resilience from Bitcoin and Ethereum, the unstable political environment and interruption of financial regulation services reinforced risk perception.
Growth rates flatten across market segments
Analysis of the market cap growth rate reveals a sharp slowdown in crypto market expansion between October 1 and November 10. This flattening resulted in an aggregate market cap loss of $408 billion, according to CryptoQuant’s Market Cap Comparison indicator.
Bitcoin saw its growth rate fall from 16.75% on October 1 to 6.60% on November 10. The top 20 assets excluding BTC experienced a decline from 32.29% to 14.67% during the same timeframe. Mid and small-cap assets faced the most drastic contraction, with growth rates plunging from 18.57% on October 1 to just 0.21% on November 10.
The shutdown’s impact was amplified by a deleveraging event on October 10, 2025. President Trump’s announcement of proposed 100% tariffs on Chinese goods caused liquidations that eliminated $19.37 billion in leveraged positions across 1.6 million traders. This was the single largest liquidation event in cryptocurrency history.
The shutdown created a challenging environment by draining liquidity from overnight funding markets. Peter Chung, head of research at Presto Research, stated that “The prolonged shutdown had the effect of draining liquidity in the overnight funding market, contributing to market jitters over the last few weeks.”
Recovery depends on data resumption
This liquidity squeeze occurred when the market was recovering from the October 10 crash, compounding damage and preventing swift recovery. The compression in growth rates, especially among smaller assets, showed risk aversion amid the absence of macroeconomic data and postponement of key legislation.
Although Bitcoin maintained elevated price levels, the market showed vulnerability to political and regulatory uncertainty. The resumption of government activities and release of economic indicators will be critical to restoring confidence and enabling the sector to return to consistent growth.
The lack of inflation data prevented the Federal Reserve from making informed decisions about interest rates and monetary policy. This uncertainty discouraged institutional capital deployment into cryptocurrency markets as investors awaited clarity on economic conditions.
Analysts suggest that restoration of government data releases, particularly inflation figures and employment reports, will provide the foundation for renewed confidence. The resumption of regulatory processes including ETF approvals could catalyze institutional inflows that support market cap recovery.
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