There are only a few days left until the midterm elections in the USA on November 3. Votes will be cast for all 435 seats in the House of Representatives and 35 seats in the Senate.
Republicans, who won the White House in the 2024 elections, now have a majority in both houses of Congress. This picture may change depending on the results of the midterm elections.
So, why does the changing balance of power in Congress concern cryptocurrencies so closely?
Because some of the most important legal regulations that will determine the future of the crypto industry in the USA have not been completed yet. If Democrats gain the majority in Congress, the Trump administration's crypto policies and financial relations with the industry may also be subject to much more intense scrutiny.
The future of crypto laws will be determined
One of the most significant impacts of the elections on the crypto industry may arise through the long-discussed CLARITY Act.
The bill, which aims to create a comprehensive legal framework for the cryptocurrency market in the USA, was passed by the House of Representatives in July 2025.
The bill aims to clarify which digital assets will be considered securities and which will be considered digital commodities. It also aims to determine what rules cryptocurrency exchanges and other market participants will be subject to.
In this context, the sharing of authority between the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) is also among the important topics.
The CLARITY Act failed to receive the necessary support in a procedural vote in the Senate on September 15.
While 50 votes were cast in favor of the bill and 49 against it, the 60-vote limit required for the negotiations to progress was not reached.
All Democrats and four Republican senators voted against advancing the bill.
One of the important reasons for the dispute was the ethical rules regarding cryptocurrency activities of high-ranking public officials. In addition, differences of opinion between the banking sector and crypto companies regarding the returns provided by stable coins also made the process difficult.
Thus, the future of the comprehensive crypto law that the industry has been waiting for a long time has become more dependent on the political balances of the new Congress that will be formed after the elections.
What does it mean for Democrats to win?
It is considered that if Democrats gain the majority in the House of Representatives or the Senate in the elections, inspections on the crypto sector may increase.
A Democratic majority win would not directly end the Trump administration's current regulatory approach towards crypto companies, according to analysis published by Reuters on October 13.
On the other hand, if they take control of congressional committees, Democrats will have broader powers to subpoena company executives and regulatory agency representatives, request documents and initiate investigations.
In particular, the Trump family's financial relationships in the cryptocurrency industry are expected to be scrutinized. Chief among these is World Liberty Financial, which is linked to the Trump family. The company has recently come to the fore with both its investments and its stable coin called USD1.
Recently, Circle shareholder J. Benjamin Greenberg also filed a lawsuit against Trump and World Liberty Financial. At the center of the case is the $500 million deal made by a United Arab Emirates-related company for a 49 percent stake in World Liberty Financial and the $2 billion investment made by the MGX fund in Binance. USD1 stable coin was used to pay for the 2 billion dollar investment in question. The plaintiff claims that Trump violated the US Constitution by obtaining income from these transactions. The White House and World Liberty Financial deny the accusations. There is no court decision yet regarding the allegations.
If Democrats gain the majority in Congress, increased political control over such transactions may also come to the fore.
SEC and crypto companies may also be under the spotlight
A possible majority change could affect not only the Trump family's companies, but also the decisions institutions make regarding the crypto industry.
According to Reuters, one of the names that industry representatives follow carefully is Democratic House of Representatives member Sean Casten. Casten, who advocates stricter regulations in the cryptocurrency market, voted against the CLARITY Act in 2025. It is stated that if Democrats win the House of Representatives, Casten could rival current senior Democratic member Maxine Waters for the Financial Services Committee chair. There is no final decision on this issue yet.
On the other hand, the SEC and CFTC continue their regulatory processes despite the disruption of legislative work in Congress. The public comment period for the SEC's new rules on cryptocurrencies ended on October 20. The institution is now expected to evaluate the comments and prepare the regulations for the final vote.
Therefore, a change in the majority in Congress does not mean that current regulatory efforts will automatically stop. The inspections to be carried out and the laws to be enacted by the new Congress may be decisive in the long-term course of the regulations.
Crypto industry spends millions of dollars on elections
Cryptocurrency companies are aware of the importance of elections. Therefore, the sector has become one of the largest sources of political financing for the 2026 midterm elections.
According to Public Citizen data, the crypto industry had contributed approximately $189 million to the 2026 elections as of June.
At the center of these activities is the political action committee called Fairshake, which supports pro-crypto candidates. Leading companies and investors in the industry, such as Coinbase, Ripple and Andreessen Horowitz, are among Fairshake's important financing sources.
In its statement at the beginning of October, Fairshake announced that it would support 32 candidates in the House of Representatives elections. 19 of these candidates are Republicans and 13 are Democrats. An election expenditure of $1 million was planned for each of the six candidates.
Fairshake and its affiliates had approximately $120 million in available resources as of the end of August. The point here is that the crypto industry does not only support Republican candidates.
The main goal of the industry is to ensure that people who support cryptocurrency regulations, regardless of party, are more likely to take part in Congress.
The failure of the CLARITY Act to advance in the Senate made the industry's relations with Democrats difficult. Fairshake announced plans to spend nearly $30 million in campaign spending against Democratic Senate candidate Sherrod Brown in Ohio in September.
What happens if Republicans maintain their majority?
The fact that Republicans maintain their majorities in both the House of Representatives and the Senate may make it easier for the Trump administration's crypto policies to gain support in Congress.
Such a result may be important in terms of continuing the work on new legislation on market structure and advancing the administration's crypto-oriented projects.
However, the fact that Republicans maintain the majority does not mean that the CLARITY Act will definitely become law. As a matter of fact, in the vote in September, all four Republican senators voted against advancing the bill.
Additionally, many legislative initiatives in the Senate require 60 votes to advance. Therefore, even if Republicans maintain their majority, Democrats' support may be needed on some regulations.
If Democrats gain a majority in one or both wings, the possibility of making changes to the content of comprehensive crypto laws, tightening ethical rules, or prolonging the regulatory process may come to the fore.
How might Bitcoin price be affected?
Historical data shows that the US midterm elections did not have a one-way and permanent price impact on Bitcoin. As a matter of fact, while Bitcoin increased in the 30 days after the 2010 and 2014 midterm elections, it decreased in the 30 days following the 2018 and 2022 elections. This table reveals that election results alone do not determine the price, and that macroeconomic conditions, regulatory expectations and developments specific to the cryptocurrency market are at least as effective as politics.
