The U.S. government shutdown that began on October 1, 2025, has directly impacted the cryptocurrency market, creating a significant roadblock for new investment products. The Securities and Exchange Commission (SEC) has halted the review of all pending crypto Exchange-Traded Funds (ETFs), including one for Hedera (HBAR), freezing a key pathway for institutional investment and contributing to market uncertainty.
An Institutional Deep Freeze at the SEC
The shutdown has forced the SEC to operate with an extremely limited, “skeleton” staff, pausing all non-emergency activities. This means the division responsible for reviewing and approving new ETFs is effectively closed. While companies can still file documents, the staff cannot declare registration statements effective, provide comments, or grant approvals. This administrative freeze has left over 90 crypto ETF applications, including those for assets like XRP, Solana, and Litecoin, in a state of limbo without a clear timeline.
The Canary Capital spot HBAR ETF is a prime example of a product caught in this hold-up. The fund had filed its final amendments, including a 0.95% sponsor fee and the ticker “HBR”, which analysts considered the final step before launch. With the shutdown, its approval is now indefinitely delayed despite being, as Bloomberg analysts noted, “at the goal line”.
Market Feels the Chill as HBAR Dips
This regulatory uncertainty has had a tangible effect on HBAR’s market performance. Following the start of the shutdown, the price of HBAR dropped approximately 5%. While the token had shown resilience and bullish momentum just days before, the shutdown introduced a new layer of risk that dampened investor sentiment. The decline underscores how closely the market watches regulatory developments and how administrative actions can directly influence crypto asset prices.
The Path Forward for the HBAR ETF
The consensus among market watchers is that the HBAR ETF has a high probability of approval once the SEC resumes normal operations, with some estimates placing the odds at 90% or higher. The next key date to watch is November 8, 2025, the deadline for the SEC’s decision on the Canary HBAR ETF, though this is contingent on the government being funded and operational by then.
For product builders and compliance teams, the current environment is a holding pattern. The situation requires patience and close monitoring of political developments in Washington. The general expectation is that the approval process will quickly pick up steam once the shutdown ends, potentially unlocking significant institutional demand for HBAR.
