Crypto rout deepens as U.S. government shutdown fears mount

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Ether (ETH-USD [https://seekingalpha.com/symbol/ETH-USD]) dropped below $4,000 to its weakest level in nearly seven weeks, deepening a digital-asset selloff that’s wiped out more than $140 billion in market value since Monday

The world’s second-largest cryptocurrency fell as much as 4.7% to $3,969 on Thursday, while Bitcoin (BTC-USD [https://seekingalpha.com/symbol/BTC-USD]) slipped 1.7%, _Bloomberg _data showed.

Other notable crypto decliners included XRP (XRP-USD [https://seekingalpha.com/symbol/XRP-USD]) -3.1%, Binance Coin (BNB-USD [https://seekingalpha.com/symbol/BNB-USD]) -2.7%, Solana (SOL-USD [https://seekingalpha.com/symbol/SOL-USD]) -3.5%, Stellar (XLM-USD [https://seekingalpha.com/symbol/XLM-USD]) -3.5%, Celestia (TIA-USD [https://seekingalpha.com/symbol/TIA-USD]) -2.3%, Uniswap (UNI-USD [https://seekingalpha.com/symbol/UNI-USD]) -2%, Avalanche (AVAX-USD [https://seekingalpha.com/symbol/AVAX-USD]) -4.8%, and Dogecoin USD (DOGE-USD [https://seekingalpha.com/symbol/DOGE-USD]) -3.2%.

The decline came as “institutional inflows cooled” and “technical signals point to short-term pressure,” said Rachael Lucas, a crypto analyst at BTC Markets.

In addition, according to decentralized betting platform Polymarket, odds of a U.S. government shutdown hit record highs, with the price of Yes-side shares for the betting contract "U.S. government shutdown in 2025?" rising to 77%, the highest since the contract's launch in January. Traders are betting on a 77% chance that the U.S. Office of Personnel Management will declare a government shutdown from a funding lapse by Dec. 31, while the odds of a shutdown as early as Oct. 1 are pegged at 63%.

US-listed Ether exchange-traded funds have already seen nearly $300 million in outflows since Monday, when $1.7 billion in bullish bets were erased in a sudden downturn. Lucas warned that more liquidations could follow if Ether breaks below $3,800.

ETHER-LINKED ETFS: iShares Ethereum Trust (ETHA [https://seekingalpha.com/symbol/ETHA]), Grayscale Ethereum Trust (ETHE [https://seekingalpha.com/symbol/ETHE]), Grayscale Ethereum Mini Trust (ETH [https://seekingalpha.com/symbol/ETH]), Bitwise Ethereum ETF (ETHW [https://seekingalpha.com/symbol/ETHW]), VanEck Ethereum ETF (ETHV [https://seekingalpha.com/symbol/ETHV]), Fidelity Ethereum Fund (FETH [https://seekingalpha.com/symbol/FETH]), Franklin Ethereum ETF (EZET [https://seekingalpha.com/symbol/EZET]), Invesco Galaxy Ethereum ETF (QETH [https://seekingalpha.com/symbol/QETH]), and 21Shares Core Ethereum ETF (CETH).

CRYPTO-LINKED STOCKS were down premarket: Coinbase (COIN [https://seekingalpha.com/symbol/COIN]) fell -0.7%, Riot Platforms (RIOT [https://seekingalpha.com/symbol/RIOT]) -0.7%, Marathon Digital (MARA [https://seekingalpha.com/symbol/MARA]) -0.6%, MicroStrategy (MSTR [https://seekingalpha.com/symbol/MSTR]) -0.5%, Sharplink Gaming (SBET [https://seekingalpha.com/symbol/SBET]) -3.9%, Bit Digital (BTBT [https://seekingalpha.com/symbol/BTBT]) -1.6%, Bullish (BLSH [https://seekingalpha.com/symbol/BLSH]) -2.2% and BitMine Immersion Technologies (BMNR [https://seekingalpha.com/symbol/BMNR]) -2% — the latter building a large ETH treasury and thus directly sensitive to Ether’s price swings.

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