Market Recovery Meets Political Deadlock: Crypto Surges, ETFs on Hold

The global crypto market has staged a powerful recovery, climbing back above the $4 trillion mark after last week’s dramatic sell-off, even as political gridlock in Washington continues to delay long-awaited decisions on multiple crypto exchange-traded funds (ETFs).

ETH, BNB, and DOGE Lead Market Rebound

Ether (ETH), BNB, and Dogecoin (DOGE) spearheaded the weekend rebound, each posting double-digit gains as traders rushed to buy the dip. According to CoinGecko data, Ether rose over 10%, BNB jumped nearly 14%, and Dogecoin gained 12% in 24 hours. Solana (SOL), Cardano (ADA), and Chainlink (LINK) also saw strong momentum, each climbing more than 10%.

The recovery followed a steep flash crash that briefly erased nearly half a trillion dollars from the market, triggered by geopolitical tensions after U.S. President Donald Trump announced a 100% tariff on Chinese exports of rare earth minerals, a move that initially sent Bitcoin (BTC) tumbling below $103,000.

Adding to the chaos, Binance experienced temporary price display errors across several altcoins, while synthetic dollar USDe briefly lost its peg due to an internal oracle malfunction. However, confidence began to return once Trump softened his rhetoric, telling reporters that the U.S. “wants to help China, not hurt it.”

As of Monday morning, Bitcoin was trading around $115,000, still below last week’s high but well off the lows, with market sentiment turning cautiously optimistic. Analysts suggest the asset could test new highs before year-end if the current bullish setup continues.

Crypto strategist Mister Crypto noted that Bitcoin is “retesting the golden cross,” a historically bullish technical pattern that has preceded major rallies in previous market cycles. Meanwhile, Jan3 founder Samson Mow said it’s “time for Bitcoin’s next leg up,” echoing growing sentiment that the next phase of the bull market may already be underway.

Institutional Players Buy the Dip

While retail traders rushed to reenter the market, institutional players also took advantage of the downturn. BitMine Immersion Technologies, the largest corporate Ether treasury holder, reportedly purchased over 128,000 ETH worth nearly $480 million during the sell-off.

BitMine’s executive chairman Tom Lee called the correction “a healthy flush,” telling CNBC that short-term volatility without structural weakness is often “a good buying opportunity.”

Bitcoin-focused firm Strategy may have followed suit, with executive chairman Michael Saylor hinting at another purchase in a post captioned “Don’t Stop ₿elievin’,” alongside a chart of the company’s BTC holdings. Meanwhile, Bitcoin miner MARA Holdings disclosed buying 400 BTC worth roughly $46 million on Sunday.

ETF Decisions Stalled by U.S. Government Shutdown

While prices rebound, the U.S. crypto sector faces a different kind of uncertainty, political paralysis. The federal government’s ongoing shutdown, now in its third week, has left key financial regulatory processes frozen, including the approval of as many as 16 pending crypto ETFs.

The U.S. Securities and Exchange Commission (SEC), which oversees ETF applications, is operating with only essential staff as Congress remains deadlocked over budget negotiations. With no clear resolution in sight, decision deadlines for several ETFs, including funds tracking Solana, XRP, Litecoin, and Dogecoin, are passing without action.

ETF analyst Nate Geraci of NovaDius Wealth Management commented on X that “once the government shutdown ends, spot crypto ETF floodgates will open,” predicting a wave of approvals that could reshape altcoin markets.

Some analysts suggest that a synchronized approval of multiple ETFs could usher in a new “altcoin season,” drawing institutional capital into tokens previously considered too volatile for mainstream investors.

Political Gridlock and Crypto’s Broader Appeal

The shutdown marks the 11th in U.S. history and the first since 2019, underscoring ongoing partisan divisions over spending priorities. Republicans are pushing to cut federal programs and reduce the national debt, which recently surpassed $37.8 trillion, while Democrats seek to preserve healthcare funding and tax credits for low- and middle-income households.

Until Congress passes a new funding bill or a temporary resolution, agencies like the SEC will remain partially closed, leaving the crypto industry in a holding pattern.

For many in the space, the situation underscores crypto’s appeal as an alternative to traditional systems vulnerable to political disruptions. As one analyst put it, “It’s ironic that the same fiscal gridlock delaying ETF approvals is exactly what drives investors toward decentralized assets like Bitcoin.”