Polymarket Surges On Shutdown Fears

The specter of a shutdown looms again over Washington, and this time, the alert comes from predictive markets. On Polymarket, bets on a closure of the US government are exploding, revealing growing distrust in the political deadlock. As Democrats and Republicans clash over the budget, signals multiply: the deadlock seems near.

An imminent political shock according to Polymarket

On Polymarket, a decentralized predictive market platform, the probability of a shutdown of the US government before January 31 reached 77 % on January 25, against barely 10 % the day before.

This sharp jump of 67 points in just 24 hours coincides with a series of political obstacles appearing in the Senate. Chuck Schumer, Democratic majority leader, announced Thursday that budget talks were deadlocked due to growing opposition from senators to a text including funding for the Department of Homeland Security (DHS). This statement immediately resonated on predictive markets, pushing traders to reassess their expectations on the negotiation outcomes.

Several key elements fueled this surge in probability on Polymarket :

• Chuck Schumer publicly confirmed the Senate is deadlocked on the DHS funding issue, an essential condition for budget adoption ;

• The absence of bipartisan consensus makes the rapid adoption of a bill before the deadline unlikely ;

• Donald Trump, questioned on the subject, said he did not wish for a shutdown but added: “if it is necessary, it is necessary,” refusing to explicitly rule out this option.

All of these factors maintain a climate of uncertainty just days before the deadline. Polymarket, by capturing collective expectations on a possible federal deadlock, acts here as an indicator of distrust towards the ongoing legislative process.

Crypto regulation threatened by institutional paralysis

Beyond short-term political calculations, the current deadlock in Washington could delay crucial reforms for the crypto sector.

Among the pending files is the Clarity for Payment Stablecoins Act, a bill intended to clarify the legal status of stablecoins in the United States. This bill could suffer a new setback if the shutdown should be confirmed in the coming days, as has already happened during previous government closures. Such a situation would considerably slow ongoing efforts to frame financial innovation without hampering competitiveness.

At the same time, some influential industry figures, including leaders from Coinbase, have withdrawn their support for the latest version of the text, considering that it could worsen the current situation.

This withdrawal comes at a critical moment, while markets seek clear regulatory guidance. The blockage of the legislative process thus reinforces the regulatory instability faced by Web3 companies, reducing medium-term visibility and potentially cooling investors’ appetite.