Polymarket odds for a US government shutdown before the end of January have surged to 77%, reflecting growing concern among traders as political tensions rise in Washington. The probability jumped 67% in just 24 hours, following renewed disputes in Congress and comments from President Donald Trump suggesting another shutdown is likely.
The spike highlights increasing uncertainty around federal funding negotiations and comes at a sensitive time for major legislation, including crypto-related bills still moving through Congress.
Polymarket Odds Surge After Senate Democrats Reject DHS Funding
The sudden increase in shutdown odds followed remarks from Senate Majority Leader Chuck Schumer, who said Senate Democrats would refuse to advance an appropriations bill if it includes funding for the Department of Homeland Security (DHS). Schumer criticized the proposal, saying it fails to address what he described as abuses by Immigration and Customs Enforcement (ICE).
Political analyst Collin Rugg pointed out the sharp rise in Polymarket betting shortly after Schumer’s statement, signaling that traders see little chance of a short-term compromise. The political backdrop intensified further after reports emerged that federal agents fatally shot a 37-year-old man in Minneapolis, an incident Schumer called “appalling and unacceptable.”
President Trump added fuel to shutdown concerns during an interview with Fox Business, stating that the country is “probably going to end up in another Democrat shutdown,” though he stopped short of confirming a timeline.
Government Shutdown Threat Clouds CLARITY Act Timeline
The shutdown risk is creating fresh uncertainty for the CLARITY Act, a major crypto regulation bill intended to provide clearer rules for digital assets in the US. The bill has already faced delays, with earlier setbacks linked to the record 43-day government shutdown that took place in October and November.
Industry support for the CLARITY Act has weakened in recent weeks. Coinbase CEO Brian Armstrong and several other crypto executives withdrew backing, arguing that the current draft could be worse than having no legislation at all. Armstrong said the industry would prefer no bill over one that harms innovation and competitiveness.
Concerns have also been raised by Galaxy Digital’s head of research, Alex Thorn, who noted ongoing disagreements over stablecoin yields. US banking groups argue that allowing yield-bearing stablecoins could undermine traditional banks, and Thorn said there are few signs that lawmakers have found a workable compromise.
While another markup attempt is expected in four to six weeks, Thorn emphasized that progress depends on whether lawmakers can resolve the gridlock around stablecoin rewards. Until then, both the CLARITY Act and broader legislative priorities remain vulnerable to the growing risk of a government shutdown.
