Democrats' sweep of Congress likely resets the political calculus for crypto, ushering in a more adversarial approach in Washington and pushing industry-friendly legislation like the Clarity Act to the back burner.
With crypto critics like Sherrod Brown (D-Ohio) returning to the Senate and Sen. Elizabeth Warren (D-Mass) retaining significant influence over financial policy, analysts say the new Congress is likely to focus on scrutinizing President Donald Trump's personal crypto dealings over supportive industry legislation.
For years, crypto fought an uphill battle in Washington, asking for clear operating rules, but often landing on the receiving end of regulation by enforcement. That shifted after Trump's 2024 election victory, giving the industry a reprieve and seat at the policy table.
"We see Sherrod Brown winning in Ohio as damaging the crypto industry's political clout as the industry worked to defeat him," Jaret Seiberg, TD Cowen's Washington analyst, said in a note Wednesday. "We did not think Clarity could advance over the next two years. This makes us more confident in our prediction."
The crypto industry spent more than $200 million to sway the midterms, hoping to get leaders elected that could push a comprehensive crypto market structure bill over the finish line after the Clarity Act stalled in the Senate.