Cryptocurrencies recovered much of their recent losses on Monday, buoyed by optimism that the U.S. government shutdown may soon end, potentially unlocking a $150–$200 billion liquidity boost, according to Arca’s research chief.

Bitcoin (BTC) initially dipped 1.5% at the U.S. market open to around $102,756, following weekend gains, but rebounded to trade near $106,000 by late afternoon. Ether (ETH) edged down 0.5% to just under $3,600, while Solana (SOL) ticked up 1.1% to $167.

Altcoins showed a mixed picture. XRP led the pack with a 9% surge amid anticipation of a U.S. spot-based ETF launch. Meanwhile, privacy-focused coins Zcash (ZEC, $455) and Monero (XMR, $386) retreated 9% and 11%, respectively, after recent strong rallies.

Crypto equities also gained ground following last week’s losses. Coinbase (COIN) climbed 4.1%, Robinhood (HOOD) rose 4.8%, eToro (ETOR) added 9%, and Gemini (GEMI) increased 5.2%. Traditional markets saw parallel gains, with the S&P 500 up 1.6% and Nasdaq rising 2.2%.

The rebound coincides with growing confidence that the 39-day government shutdown may soon end. A late Sunday post by former President Donald Trump proposing a $2,000 “tariff dividend” for Americans added to market optimism. Polymarket data now shows traders placing an 86% chance that the shutdown could conclude between November 12–15.

Shutdown Delays Crypto Policy Progress

David Nage, head of research at digital asset investment firm Arca, highlighted the mixed implications of the shutdown for the crypto sector. On one hand, reopening government operations could release $150–200 billion from the Treasury General Account into bank reserves, providing a notable liquidity boost that historically benefits risk assets, including cryptocurrencies.

On the other hand, the ongoing shutdown has stalled key regulatory initiatives, including the CLARITY Act and the Senate’s digital asset market structure bill. Nage warned that delays could push comprehensive U.S. digital asset legislation past the 2026 midterm elections, risking derailment.

“If critical legislation is postponed until 2026 and then falters amid midterm politics, the industry could miss the clarity needed to attract institutional capital and sustain growth,” he said.

Nage noted that while the shutdown’s effects on crypto have been less visible than recent repo market volatility, the long-term impact on policy could be more significant. “The future of U.S. digital asset adoption is being shaped behind the scenes, but committee staff offices remain empty due to the shutdown,” he added.

He concluded that the timing of the shutdown’s resolution will be crucial: “If it ends this month, markets could benefit from both a liquidity surge and a window for legislative progress. If it extends into December, that opportunity may be lost.”