The US government has shut down again. Will this time be a rally or a decline?

From safe-haven benefits to institutional harvesting, this shutdown might lead to a completely different outcome than in 2025.
In the investment world, the most dangerous thought is "this time is the same."
In October 2025, the US government shutdown lasted 43 days, and Bitcoin surged against the trend to $110,000, establishing its status as "digital safe-haven gold." But at the dawn of 2026, all macro logic has quietly shifted.
Here are four core aspects I believe will cause the market to decline (rather than replicate last year's big rally) due to this shutdown:
1. The underlying logic of monetary policy has changed: from "water heating" to "freezing"
2025 (Interest rate cut cycle):
At the time of the shutdown, the Federal Reserve was in a loosening phase. The market believed the shutdown would drag down the economy, forcing the Fed to cut interest rates more aggressively. For Bitcoin, shutdown = more cheap funds.
2026 (Hawkish stance):
Now, the Federal Reserve (Federal Reserve) faces inflation rebound pressures and is unusually hawkish. In this environment, government shutdowns are no longer seen as a reason to cut rates but rather as a risk of "economic chaos." When money becomes more expensive and scarcer, investors will prioritize selling high-volatility assets like Bitcoin to hold cash.
2. Institutionalized chip structure: from "safe-haven faith" to "risk management"
2025:
The spot ETF was recently approved, and a large amount of capital is in a "faith-building" phase, tolerant of political turmoil.
2026:
Bitcoin has deeply entered institutional portfolios. According to Farside Investors, recent ETF fund flows have shown several weeks of net outflows. For Wall Street institutions, Bitcoin now resembles a "high-multiple Nasdaq stock." When government shutdowns cause macro uncertainty to surge, institutions' first reaction is "deleveraging" and "reducing positions," rather than rushing into the market like retail investors.
3. Market psychology priced in advance: from "unexpected good news" to "good news exhausted"
2025:
At that time, the shutdown was unexpected for many, and the safe-haven narrative was fresh, attracting off-market funds.
2026:
Rumors of a shutdown have been floating in the market for weeks. According to the Coinglass sentiment index, this political game has already been priced in by professional traders. "Buy the rumor, sell the fact" is a fundamental rule in finance. When the government finally locks the doors, it often marks the start of profit-taking by longs and a rebound by shorts.
4. Information black box effect: from "ignoring data" to "blind flying"
2025:
The market was in a unilateral upward trend, and everyone was buying regardless of economic data.
2026:
The current market heavily relies on CPI, non-farm payrolls, and other data to predict policy directions. A shutdown would interrupt data releases. In today's quantitative trading-dominated environment, "no data" means "risk out of control." Large quant funds, when unable to see the road ahead, tend to collectively withdraw buy orders, making market liquidity fragile as paper under selling pressure.
If the 2025 shutdown was a "stress test" of Bitcoin's safe-haven properties, then the 2026 shutdown might evolve into a "liquidity stampede."
The same script can have different endings because Bitcoin has transformed from a "marginalized rebellious asset" into a part of the "mainstream financial system." When it wears a suit (ETF), it must bear the constraints that come with it: it has to dance to the tune of liquidity, rather than partying alone in chaos as before.