Uptober in the shadow of Washington’s shutdown

Every October, crypto markets revive the idea of “Uptober”, the seasonal rally where Bitcoin and its peers have historically delivered strong performance. Investors, traders, and meme-makers alike look forward to this time of year with hope for green candles and renewed momentum. But this year, the specter of the U.S. government shutdown looms large over financial markets, raising a critical question: can “Uptober” really happen while Washington is at a standstill?

The short answer: yes, but with caveats.

A government shutdown does not directly impair the Federal Reserve — it’s self-funded — and doesn’t legally prevent the SEC from taking action. Yet in practice, the SEC may be constrained: with skeleton staffing, its ability to process the backlog of spot Bitcoin ETF applications is limited. For investors who have been positioning around a long-awaited approval, this may introduce delays and fresh uncertainty.

The quiet significance of SEC-CFTC alignment

Amid the regulatory noise, one development merits more attention than it’s received: the possibility of greater alignment between the SEC and the CFTC, as recently advocated by former SEC Commissioner Paul Atkins. While the two agencies have overlapping jurisdictions in digital assets — with the SEC traditionally overseeing securities and the CFTC commodities — Atkins argues that more coordination or even harmonization could provide clearer paths for token classification, oversight, and capital markets access.

It matters a lot: if the SEC and CFTC begin converging on standards (e.g. which assets are securities, how spot vs. derivatives markets are regulated, or how registration/exemptions apply), it could reduce uncertainty for issuers, exchanges, and funds. That regulatory clarity would become a powerful tailwind for markets, especially as new crypto products proliferate. In a way, this alignment could do more for the future of digital assets than any single ETF approval.

In the meantime, it’s unknown how long this shutdown will last. The irony is that crypto markets often thrive in uncertainty. The lack of clarity around regulatory timelines has never stopped Bitcoin from rallying before, and seasonality, combined with macro drivers such as deteriorating job market data or evolving Fed expectations, could still carry momentum into this famous “Uptober.” In fact, a temporary delay from the SEC may not derail the narrative if the market internalizes that ETF approvals are inevitable rather than optional.

Still, this isn’t a license to bet blindly. If the shutdown drags on, economic data releases may stall, clouding both Fed decisions and broader risk sentiment. With crypto’s correlation to equities still significant, volatility could spill over. Uptober might become a rougher ride than bulls hope.

What, then, should we imagine for the SEC, and for Bitcoin? Procedural delays are almost certain. But a permanent shift in regulatory direction is unlikely. The structural demand for regulated crypto exposure is intensifying, from institutions, asset managers, and a growing ETP industry. Whether the SEC takes another month or another quarter, the destination remains the same: a broader, more accessible crypto capital market.

Uptober might still happen. But instead of banking on seasonal trends, investors should anchor on larger structural forces: Bitcoin’s maturation as a macro asset, the evolving roles of altcoins, and the slow but meaningful march toward regulatory clarity. In the end, alignment between U.S. regulators may matter more than any single market cycle.