Prediction market traders assigned a 77% probability to another U.S. government shutdown by January 31, up from roughly 10% just 24 hours earlier.
The dramatic shift followed a fatal Border Patrol shooting in Minneapolis and threats from Senate Democrats to block funding legislation.
The odds spike represents a 67 percentage point increase on the world's largest prediction market. More than $2 million in trading volume backs the contract asking whether the federal government will shut down before month's end.
Senate Majority Leader Chuck Schumer stated Democrats would not vote to proceed with appropriations legislation if it includes Department of Homeland Security funding.
His announcement came hours after a Border Patrol agent fatally shot 37-year-old ICU nurse Alex Pretti in Minneapolis during immigration enforcement operations.
The Political Standoff
The current continuing resolution expires January 30. The House passed appropriations legislation on January 22 with a 341-88 bipartisan vote.
Senate passage appeared certain until Saturday's events in Minneapolis.
Democrats now demand reforms to immigration enforcement operations before approving DHS funding. Minnesota Governor Tim Walz called the shooting "appalling" and demanded removal of federal agents from the state.
A major winter storm approaching Washington could delay senators' return to the Capitol. The compressed timeline gives lawmakers just days to reach agreement before funding lapses.
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Impact on Crypto Legislation
The shutdown threat complicates passage of the CLARITY Act, pending cryptocurrency regulatory legislation.
The bill stalled during the 43-day government shutdown from October through November 2025, the longest in U.S. history.
Coinbase CEO Brian Armstrong withdrew support for the current CLARITY Act draft, warning it could worsen the regulatory environment.
Galaxy Digital's Alex Thorn noted negotiations over stablecoin yields remain deadlocked with no compromise in sight.
The previous shutdown's economic disruption cost federal contractors billions and rattled markets. Traders on Polymarket now price significant risk of a repeat, with appropriations negotiations collapsing over immigration enforcement disputes rather than fiscal policy disagreements.
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