After 42 days, the longest government shutdown in U.S. history is over — and crypto is instantly back at the top of Washington’s agenda. Within hours of the reopening, Congress resumed work on major market structure bills, the Senate Agriculture Committee re-released its crypto spot market draft, and confirmation hearings were announced for Mike Selig — Trump’s pro-innovation pick for CFTC Chair. The message from D.C. is loud and clear: crypto is no longer a side topic — it’s economic infrastructure.
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LearningTranscript
00:00All right. Welcome back to the deep dive. We are jumping straight in today. We've got a huge stack
00:05of sources here detailing, well, a pretty critical moment in U.S. finance regulation. We're talking
00:10about what happened right after the longest government shutdown in history finally ended.
00:15So let's just set the scene a bit. After 42 really brutal days, the federal government is back. It's
00:21fully online. This all happened when, you know, a bipartisan group managed to push through a
00:26three-month funding bill. President Trump signed it just before 10 p.m. ET. And while that does set
00:32up another funding cliff in January 2026, we're not really focused on the politics today. Our mission
00:38is to look at the regulatory domino effect because that shutdown, it froze everything. Crypto rules,
00:42ETF approvals, all of it. Now that Washington's back, the sources are basically screaming that
00:47crypto just shot to the very top of the agenda. And that speed is the real story here. I mean,
00:52that's the aha moment. The shutdown didn't kill the momentum for policy. It just, you know,
00:57damned it all up. Think of it like a dam that just burst. Congress, the regulators, they aren't
01:03just picking up where they left off. No, they are moving at a phenomenal pace to catch up.
01:07So this delay has turned into a rush. It's pushing us into what our sources are calling a
01:12hyper-accelerated 2026 regulatory push. Everything the industry's been waiting for, it's all happening at
01:19once. Right. And the first place we see that is with the big agencies, the SEC and the CFTC.
01:24For those 42 days, they were basically running on skeleton crews, right? Oh, absolutely.
01:28Staff furloughs meant that everything just stopped. Yeah. ETF approvals, new listings for exchanges,
01:33enforcement reviews. It was genuine regulatory paralysis. So now that they're fully staffed again,
01:39what does that mean, practically speaker? It means the queue is finally moving and moving fast.
01:44We should see immediate progress on more ETFs. And not just Bitcoin ETFs, but maybe others.
01:50Potentially, yes. And we'll also see movement on tokenized securities filings, things that need a
01:55regulatory sign-off. And this is important. Enforcement is resuming under what could be new
02:00crypto-friendly leadership in some of these key seats. So our sources are pretty optimistic. They
02:07think this could all lead to significant U.S. regulatory clarity as early as Q1-2026.
02:12Okay. Q1-2026. That sounds incredibly fast for Washington. I mean, we're talking about a city
02:18known for slowing things down, not speeding them up. What could possibly derail that timeline?
02:24It's a fair question. Bureaucracy is always the enemy. The big risk is that funding bill. It only
02:29lasts three months. So if lawmakers decide to use that January 2026 cliff for leverage,
02:34things could grind to a halt again. But the consensus in our sources is that the pressure to
02:38regulate crypto both from inside the country and globally, it now outweighs the desire for another
02:42shutdown. The issue's just gotten too big. They can't ignore it. That makes this next detail we
02:47found even more interesting, the market's ingenuity during that freeze. Apparently,
02:52some ETF issuers actually found a procedural workaround. They launched products without
02:57explicit SEC approval during the shutdown. It's a fantastic story. A real case of innovation
03:03versus bureaucracy. See, the SEC has this concept called deemed approval. If an issuer files a
03:11registration and the SEC doesn't explicitly reject it or ask for an extension by a deadline... It can
03:17become effective automatically. Exactly. And during the shutdown, there was nobody there to file the
03:21rejections or the extensions. So the lack of a no effectively became a yes. Precisely. It created
03:27this temporary, very specific loophole where inaction meant approval. It just shows that innovation doesn't
03:33wait for Washington to get his act together. Okay. So while the regulators were turning the lights back
03:36on, Congress was already moving. The same week the shutdown ended, they were back to work on major
03:41market structure legislation. And this is where we go from, you know, day-to-day operations to long-term
03:47structural fixes. The big question is still, who regulates the crypto spot market? The Senate
03:54Agriculture Committee has already put out a draft bill, a detailed one. It defines the CFTC's role over
03:59crypto spot markets, which is a huge step. Because it starts to draw the line between the CFTC
04:04for commodities and the SEC for securities. It's the foundation for everything else. All future
04:11clarity will be built on that distinction. And speaking of the CFTC, there's also movement
04:15on leadership. A confirmation hearing is now set for Mike Selig, Trump's nominee for CFTC chair.
04:21What's the read on him? Well, Selig is a well-known attorney in the space. He's been very vocal
04:26about being pro-innovation, pro-crypto. So his confirmation would signal a very clear strategic
04:31direction. You'd have clear legislation defining the CFTC's role paired with a leader who actually
04:37wants to foster growth. That's a powerful combination. So if they keep this pace, you're
04:41saying we might finally get that comprehensive crypto bill that everyone's been talking about
04:44since, what, 2017? That's what the sources are pointing to. The political stars are finally
04:49aligning. I mean, the industry has been in a gray zone for years using laws from the last century.
04:54But now when election is over, there's clear bipartisan agreement on the need for the U.S.
04:59to be competitive. The odds of getting a real nationwide market structure law are higher
05:05than they've ever been. It's a shift from regulation by lawsuit to regulation by law.
05:10Okay, let's shift gears from market structure to something that hits every single user. Taxes
05:14and banking. The IRS and the OCC are back in business too. And that might be even more important
05:20for the average person. Absolutely. Let's start with taxes, which is, let's be honest,
05:24the biggest headache for most people. The IRS is now resuming its public feedback analysis for
05:29new crypto tax rules, the ones tied to the Genius Act. That was completely stalled for six weeks.
05:35Okay, let's unpack that. The Genius Act. Why is that IRS feedback so critical?
05:40The Genius Act is all about modernizing tax reporting. For crypto, it's the law that's pushing
05:45the IRS to create clear rules for DeFi. It's supposed to reshape how you report income from
05:51staking, from NFTs, and from maximal extractable value, or MEV.
05:57Right. Hold on. Let's define MEV because that's a nightmare from a tax perspective.
06:01It is. So MEV is basically the profit that block producers or validators can make
06:06by strategically ordering transactions in a block. It's a very sophisticated way to make money from
06:11transaction flow. And taxing it is hard because it's opaque and earned by all these different
06:16decentralized actors. Exactly. It's almost impossible to apply traditional tax reporting
06:20to it. The Genius Act is supposed to finally bring some clarity there.
06:23That really highlights the complexity. And on the banking side, you mentioned the OCC.
06:28Right. The office, the controller of the currency. They're the main regulator for national banks.
06:32They're restarting their work on stablecoin custody guidance, on bank charters for crypto companies.
06:37The OCC is the gateway. They're how traditional finance can safely interact with crypto.
06:42When they stop, everything stops. So if you connect the dots with the IRS and OCC back online,
06:492026 isn't just about market structure. It's about clarity for actual users.
06:54Precisely. It could be the year that U.S. crypto taxes finally become, you know, understandable.
06:59That would lower the barrier for so many users and businesses. And at the same time,
07:03it could finally open the floodgates for traditional banks to get involved.
07:07Let's zoom out a bit. The politics of this. The shutdown only ended because Democrats and
07:12Republicans came together. And that bipartisan unity is the secret weapon here. Usually,
07:17Washington is pure gridlock. But crypto regulation is one of the few places where that same coalition
07:23is actually working together. On stablecoins. Market structure.
07:27Exactly. They agree on empowering the CFTC. It signals that crypto is no longer a fringe political fight.
07:32It's becoming a bipartisan infrastructure issue.
07:35And a lot of that pressure is coming from overseas, isn't it? The U.S. was paralyzed while
07:39everyone else was moving forward.
07:41They absolutely were. Europe has MICA. You have hubs in Asia like Hong Kong, Singapore, Japan.
07:47They all surged ahead. MICA, for instance. That's the EU's comprehensive crypto framework.
07:52It provides legal certainty across 27 countries.
07:56So while the U.S. was arguing over basic definitions.
07:59Europe already had clear rules. The pressure is huge because capital flows to certainty.
08:04So what does this tell us about the mindset in Washington now? Have they moved past
08:08seeing crypto as just a speculative asset?
08:11That's the single biggest takeaway from our sources. Yes. They're not seeing it as a speculative
08:16toy anymore. They see it as critical economic infrastructure. This isn't about whether Bitcoin's
08:22price goes up. It's about global leadership. If the U.S. falls behind on tokenized securities or on Web3
08:28digital identity or especially on stablecoin payment systems.
08:32It threatens the dollar.
08:33Threatens the dollar's dominance and the competitiveness of U.S. markets. The urgency is finally real.
08:38OK, so let's tie it all back to the market. What's the immediate reaction from investors now that this
08:43government overhang is gone?
08:44It's a major bullish signal. Just removing that uncertainty is huge. Investors are now pricing in
08:50faster ETF approvals, new exchange registrations, clarity on stablecoins. That kind of certainty is rocket
08:56fuel for institutional adoption. And are there specific sectors you think will benefit the most in the
09:02near term? We expect this to fuel a rally in the first half of 2026, and it's going to favor the platforms
09:08that are ready for compliance. So major U.S. exchanges, the big stablecoin issuers, institutional DeFi
09:13platforms, and crucially, the payment-focused layer one, think SUI, Solana, BASE, Avalanche. They need clear
09:21rules before big enterprise use cases can really take off. Which brings us to a final provocative
09:27thought for you to think about. We mentioned earlier how some NTF issuers used that procedural
09:31workaround, that deemed approval loophole, to get products out during the shutdown. If that worked,
09:37if they successfully exploited a gap in the bureaucracy, does that make the need for explicit
09:41regulatory sign-offs less relevant in the future? Is innovation just getting too fast for the old way
09:46of doing things, something to mull over? The government is definitely open again. And Washington
09:50is coming back to crypto with full force. And if you found this deep dive valuable, please take a
09:57moment to engage with our content. Yeah. Whether you're listening or watching, leaving a comment,
10:01subscribing, hitting that notification bell, it really does help support our work. It boosts us in
10:07the algorithm. And honestly, it lets us know that you find this valuable. It helps us keep covering these
10:11huge macro shifts that are shaping crypto's future. Thank you for diving in with us. We'll see you next
10:17time.
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