Crypto Market Rises on Trump’s Tariff Dividend and Potential Shutdown Deal

Following last week’s steep declines, the crypto market is showing signs of recovery. Total market value is up 4.6% to $3.58 trillion. Support from policy measures, clearer regulations, and expected liquidity is helping the rebound. The Fear and Greed Index at 29 suggests investors are still cautious.

Tariff Dividend Lifts Market Sentiment

President Donald Trump’s announcement of a $2,000 tariff dividend has been a significant catalyst for market confidence. The program, which will allocate more than $400 billion of tariff revenues to American adults, is reminiscent of previous stimulus checks. The move signals substantial liquidity entering the economy and, by extension, the crypto sector.

Trump emphasized that the payments would largely exclude high-income earners while helping to reduce the $37 trillion federal debt. Analysts at the Kobeissi Letter estimate that over 85% of adults will qualify, describing it as “another round of stimulus checks”. Such measures historically encourage risk-on behavior, and cryptocurrencies are no exception.

The impact was immediate: Bitcoin jumped above $103K and now trades near $106K, marking a 4% increase in a single day. Other significant gainers include:

• Uniswap: +17.5%.
• Hedera: +14%.
• XRP: +12%.
• Stellar: +11%.
• Chainlink: +8.3%.
• Cardano: +7.1%.
• Solana: +6.4%.
• Ethereum: +6.1%.

The Impact of a Potential Government Shutdown End

Positive sentiment in crypto grew after reports that the U.S. Senate is moving toward a deal to end the government shutdown. According to Axios, ten or more Senate Democrats are willing to support a spending plan to fund the government through January. The plan would also protect federal workers from layoffs and continue tax credits under the Affordable Care Act.

This potential deal has eased uncertainty, giving investors confidence that federal operations will continue. Together with the tariff dividend, it has created a favorable mix of optimism and liquidity, increasing inflows into crypto.

Regulatory clarity is also improving. Caroline Pham, acting chair of the Commodity Futures Trading Commission, said regulated spot crypto trading products can move forward under current authority. These products could launch as early as December 2025, offering investors a more stable market.

Trading Activity and Market Dynamics

The recent rebound in prices has been accompanied by a noticeable rise in trading activity. Open interest in crypto futures increased 5% in a single day to $148 billion, suggesting traders are gradually regaining confidence. Leverage is returning slowly, showing hope but also some caution.

Bitcoin passing $106K triggered large short liquidations, forcing over 118,000 traders to close bearish positions totaling $342 million. The largest single trade on Hyperliquid reached almost $19 million. These moves added momentum to the rally, showing how market mechanics can drive fast price changes.

Despite the uptick in trading, the market remains sensitive. Short-term volatility may continue as traders assess macroeconomic developments alongside regulatory updates.

What to Expect Next?

The recent rally shows how U.S. policy, market liquidity, and investor confidence are connected. With the tariff dividend and the possible government shutdown, cryptocurrencies seem ready for more activity, but caution is needed.

Investors should follow regulatory updates, economic data, and stimulus-related liquidity. How these factors come together will likely decide if the rally continues or ends soon.