Democrats Take Congress: Is the Crypto Market Losing Its Footing?

The Democrats’ win in the US midterm elections on November 3–4, 2026, has changed the political outlook for the crypto industry. They won majorities in the Senate (about 54 seats) and the House of Representatives (more than 228). Efforts to advance the CLARITY Act, the bill that would set rules for the crypto market, are now in jeopardy, and Donald Trump’s projects will face even closer scrutiny from the opposition. The market dipped briefly before recovering, though investor sentiment has clearly soured.

“We’ll work with the Democrats… we’ll probably figure something out,” Trump said.

What Will Happen to the CLARITY Act

The CLARITY Act is meant to divide authority between the two main US financial regulators, the SEC and the CFTC, and to set clear rules for how crypto companies operate.

Without it, the industry will keep depending on case-by-case regulatory decisions and litigation. For businesses, that means uncertainty: the rules can change from one administration to the next.

The September vote already showed that reaching a deal on the bill isn’t easy. Now that they control Congress, Democrats can push harder for their demands, chiefly restrictions on politicians who run crypto businesses.

The CLARITY Act won’t necessarily vanish from the legislative agenda, but its passage could be delayed for a long time.

According to the investment firm TD Cowen, the new makeup of Congress has sharply reduced the chances of the CLARITY Act passing in the next two years. If the current Congress doesn’t get it over the line by January 3, 2027, the bill will have to be reintroduced.

Market Sentiment

Overnight, as the first results came in, Bitcoin sank to around $75,600. By morning on November 4, it had climbed back above $78,000 and was up slightly over the past 24 hours. At press time, it was trading at $80,500.

Ether gained 6.39% in the past 24 hours. Trump-linked tokens, however, tumbled: TRUMP slid more than 11%, and WLFI lost 8%.

According to Santiment, the ratio of positive to negative comments about Bitcoin fell to 0.51 (roughly 51 positive comments for every 100 negative ones). Two weeks earlier, on October 20, the figure was about 1.8.

Many had expected a sharp drop after control of Congress shifted to the Democrats, but prices stabilized once the uncertainty lifted.

Editor-in-Chief’s Take

Crypto has tethered itself too closely to the political balance of power. The CLARITY Act was blocked on September 15 precisely because Democrats weren’t satisfied with either the level of regulation or the restrictions on politicians’ crypto activity. In other words, politicians back crypto, but they also tie it to themselves, with all the attendant risks. One chamber is friendlier, while the other pushes for tighter rules.

Ironically, Trump himself has become one of the main obstacles to crypto’s development: his own projects (memecoins, World Liberty and the like) undermine trust, and he has turned crypto into a manipulative tool for personal enrichment. Democrats are going after Trump because everything he does looks less like a legitimate business and more like a scam industry run by a head of state.

The market got spooked by the Democrats’ victory but didn’t crash. Many were bracing for a sharp drop. It never came; prices rose instead. Political uncertainty, it seems, worries the crypto market more than an election result that’s already known. The Democrats’ victory doesn’t give the industry any new regulatory clarity, but it does make the near-term risks easier to assess.

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