The U.S. midterm elections officially get underway today. The latest data from Kalshi puts the Democrats’ chances of winning the Senate at 76%, and their chances of winning the House at 94%. If this forecast comes true, it would mean a fundamental shift in Washington’s political landscape—and the crypto industry is right in the eye of the storm.
First, the legislative pipeline will be completely frozen. Over the past two years, the Republican-led Congress passed the GENIUS Act and advanced the CLARITY Act through the House, but the latter stalled in the Senate over disputes about stablecoin rewards and ethics provisions. If Democrats retake the Senate, Elizabeth Warren will become chair of the Banking Committee, and her sharpest weapon will be her subpoena power. Wintermute’s head of policy expects her to focus on reviewing the OCC’s approval of new bank charters for Ripple, Coinbase, and World Financial, backed by the Trump family. More importantly, in Ohio’s election race, Fairshake PAC has spent $30 million supporting crypto-friendly Republican Hustad. If former Banking Committee chair Sherrod Brown wins and becomes chair of the Agriculture Committee, related crypto legislation could be shelved outright.
Second, the market has already voted with its feet in advance. Bitcoin fell below the $77,000 mark today, with a 24-hour low of $76,335, and Ethereum dropped to $2,247. This is not panic, but a typical wait-and-see pullback in volume. HTX Research's baseline view is very clear: elections can change policy expectations, but they cannot directly lower holding costs, nor can they automatically turn sidelined funds into BTC buying. An upward move requires three conditions to connect step by step: expectations for macro tightening stop worsening, spot funds resume net inflows, and policy changes bring executable business opportunities. If the election result is clear but the latter two supports are missing, any rebound may mainly come from lower risk premiums and short covering, and its sustainability should be assessed cautiously.
Third, but there is no need to panic excessively; the real pricing power is not in Congress's hands. The Federal Reserve raised rates to 3.75%-4.00% in September, and September CPI showed price pressures rising again. Congress makes laws, but it cannot interfere with the Fed. Interest rates and dollar liquidity are the main drivers of the crypto market's broader trend. A Republican victory would only reduce regulatory uncertainty and bring short-term sentiment support; a Democratic advantage is more of a long-term drag and is unlikely to directly trigger a crash. A split Congress is the most common outcome, which makes legislation prone to deadlock, and the market quickly returns to the macro mainline.
At the trading level, asset classes need to be distinguished. Bitcoin and stablecoins are relatively less affected by election results, but DeFi, some other crypto assets, and emerging trading businesses are more dependent on market structure legislation and regulatory interpretation. Currently, cumulative net outflows from BTC spot ETFs over the first ten trading days of October are about $537.4 million, while ETH spot ETFs saw net outflows of about $825.1 million, for a combined total of about $1.3625 billion. There are not yet signs of a broad expansion in liquidity. After the election result is announced, if there is no follow-through from spot funds, the sustainability of any rebound will need to be questioned.
My view is conditional: the election result itself is not a directional trading signal. What really needs to be tracked is whether post-election spot ETF inflows resume, as well as the fiscal bargaining pace around the December 11 spending authorization deadline and the first-quarter 2027 debt ceiling window. If, after tonight's result, BTC reclaims above 78,000 on volume and ETF flows turn positive, a short-term repair window will open. If it continues to grind lower on shrinking volume, it suggests the market is waiting for macro data, not political outcomes.
Chat in the comments: after tonight's election result is out, do you think Bitcoin will first reclaim 78,000, or continue testing 75,000?
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The above content is only a summary of market information and logical analysis and does not constitute any investment advice. The crypto market carries extremely high risk. Please make decisions cautiously according to your own risk tolerance.