In the U.S. midterm elections, Democrats won control of both the House and the Senate—a bad sign for the crypto industry. After the results came in, BTC briefly fell below $76,000, then quickly staged a V-shaped rebound to around $78,000. Why did it fall first and then rise? Because the market had already priced in a Democratic victory: Polymarket put the odds above 65% before the election. What really rattled the market was “uncertainty,” not the “Democrats” themselves.
But the real issue isn’t price—it’s legislation.
The industry’s most-wanted bill, the CLARITY Act (the Digital Asset Market Structure Act), was meant to give exchanges and token issuers a clear regulatory framework. The bill passed the House in July 2025, but failed a procedural vote in the Senate in September, 49 to 50. It was already stuck. Now that Democrats control Congress, TD Cowen’s analysis is blunt: there won’t be a market structure bill in the next two years.
What stings even more is that the crypto industry spent over $170 million on political donations in this election cycle, with most of it backing Republicans—and still lost every key battleground. Ohio Senator Sherrod Brown won his seat back despite crypto PACs spending about $64 million to defeat him.
Still, don’t panic too much. The pro-crypto guidance already issued by the SEC and CFTC won’t automatically disappear just because Congress has changed hands, and Trump’s executive orders are still in effect. What’s really taking a hit are initiatives that depend on new legislation: a compliance pathway for DeFi, token classification rules, and federal licenses for exchanges. Bitcoin and stablecoins are relatively insulated because they’re less reliant on Congress passing new laws.
The bottom line is blunt: BTC will rise and fall as it does, but altcoin and DeFi projects hoping Washington will legitimize them shouldn’t count on it over the next two years.
But the real issue isn’t price—it’s legislation.
The industry’s most-wanted bill, the CLARITY Act (the Digital Asset Market Structure Act), was meant to give exchanges and token issuers a clear regulatory framework. The bill passed the House in July 2025, but failed a procedural vote in the Senate in September, 49 to 50. It was already stuck. Now that Democrats control Congress, TD Cowen’s analysis is blunt: there won’t be a market structure bill in the next two years.
What stings even more is that the crypto industry spent over $170 million on political donations in this election cycle, with most of it backing Republicans—and still lost every key battleground. Ohio Senator Sherrod Brown won his seat back despite crypto PACs spending about $64 million to defeat him.
Still, don’t panic too much. The pro-crypto guidance already issued by the SEC and CFTC won’t automatically disappear just because Congress has changed hands, and Trump’s executive orders are still in effect. What’s really taking a hit are initiatives that depend on new legislation: a compliance pathway for DeFi, token classification rules, and federal licenses for exchanges. Bitcoin and stablecoins are relatively insulated because they’re less reliant on Congress passing new laws.
The bottom line is blunt: BTC will rise and fall as it does, but altcoin and DeFi projects hoping Washington will legitimize them shouldn’t count on it over the next two years.