Crypto Market Takes a Hit Amid Political Chaos

The crypto market saw a massive drop of around $100 billion late on Sunday. This happened because people were worried about the US government possibly shutting down again. Democrats in the Senate said they wouldn't support a funding plan that included money for the Department of Homeland Security. They were upset about how Immigration and Customs Enforcement (ICE) was handling things. The market cap of all cryptocurrencies fell from $2. 97 trillion to $2. 87 trillion in just six and a half hours. Bitcoin (BTC) dropped by 3. 4% in the last 24 hours. Altcoins like Ether (ETH) were hit even harder, with a 5. 3% drop. Over $360 million worth of leveraged crypto positions were also wiped out, with $324 million of those being long positions.People who bet on prediction markets like Kalshi and Polymarket think there's an 80% chance the US government will shut down by January 31. This fear was fueled by President Donald Trump threatening to raise tariffs on Canada and the US sending warships to the Middle East because of tensions with Iran. Crypto investors remember what happened during the last government shutdown. Bitcoin fell from its all-time high of $126, 080 to below $100, 000. This was partly because of the shutdown and partly because of a market crash caused by Trump's tariff threats with China. Since then, gold has been doing better than Bitcoin, showing that people still prefer traditional safe-haven assets when things are uncertain. The Crypto Fear & Greed Index, which tracks market sentiment, fell to 20 out of 100 on Monday. This means the market has been in the "extreme fear" zone for six days straight.