U.S. elections: What awaits the crypto industry after the Democrats' victory?

​Democrats secured a convincing victory in the U.S. midterm elections, depriving Donald Trump of a Republican majority in Congress. For the crypto industry, which invested hundreds of millions of dollars in Republicans, this is a major setback. But the consequences of the elections could prove far more unpredictable.

Democrats redraw the U.S. political map

In the November 3 midterm elections, Democrats secured majorities in both chambers of Congress. According to preliminary results, the party won 220 seats in the House of Representatives and 53 seats in the Senate. The scale of their victory exceeded pollsters' expectations.

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One of the biggest surprises came from Texas. Democrat James Talarico defeated Republican Ken Paxton, becoming the first member of his party elected to the U.S. Senate from the state in 38 years. Democrats also won the Texas gubernatorial election and secured Senate seats in South Carolina, Ohio, Kansas, and other traditionally Republican states.

The main reason for the Republican defeat was Americans' dissatisfaction with the economy. According to exit polls, nearly 90% of voters identified the cost of living as an important factor in their decision, while about two-thirds blamed Trump for high prices. Voters were also frustrated by tariffs, the war with Iran, and the growing influence of billionaires on American politics.

The new Congress will take office in January 2027. Donald Trump will remain U.S. president but will lose the support of a Republican majority in Congress for the final two years of his term. Democrats will be able to block his legislative initiatives, lead key congressional committees, and launch investigations into his administration. Trump, however, will retain the power to veto legislation passed by Congress.

The bet on Trump failed to meet expectations

The crypto industry actively supported Donald Trump during the 2024 presidential election, hoping for lighter regulation. During his campaign, he promised to turn the U.S. into the world's crypto capital, establish a national Bitcoin reserve, and end aggressive regulatory enforcement. Major crypto companies directed hundreds of millions of dollars toward candidates who supported the development of digital assets.

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After returning to the White House, Trump delivered on only a small portion of his promises. In March 2025, he signed an executive order establishing a Strategic Bitcoin Reserve, and later that summer, the GENIUS Act came into force, introducing federal rules for payment stablecoins. However, the reserve is funded primarily with Bitcoin already seized by the government, while the most important legislative reform of the cryptocurrency market remains unfinished.

The legislation in question is the CLARITY Act, which aims to define the respective regulatory powers of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The House of Representatives approved the bill in July 2025, but it faced opposition in the Senate and failed to secure enough votes to advance. One of the main disagreements involved Democratic demands to prevent the president from personally profiting from cryptocurrency businesses.

The crypto lobby also tried to influence the 2026 midterm elections. One of the clearest examples was the Senate race in Ohio. Political organizations linked to the industry spent approximately $63 million supporting Republican Jon Husted and opposing Democrat Sherrod Brown, a longtime crypto critic. Despite that spending, Brown won and returned to the Senate.

However, not all candidates supporting cryptocurrencies were defeated. For example, Democrat James Talarico, who won in Texas, received a high rating from Stand With Crypto for his position on digital assets. He had previously supported the creation of a strategic Bitcoin reserve at the state level.

Cryptocurrency reform under threat

Democratic control of Congress could significantly change cryptocurrency regulation in the U.S. The party will gain leadership of key congressional committees and could strengthen oversight of financial regulators. Particular attention may be directed toward the Trump family's cryptocurrency ventures, including World Liberty Financial. Meanwhile, Sherrod Brown, a prominent crypto critic, could become chair of the Senate Agriculture Committee, which also oversees matters related to digital asset regulation.

However, the Democrats' victory does not necessarily mean an end to cryptocurrency reform. HashKey Group senior researcher Tim Sun told Traders Union in an exclusive comment that the CLARITY Act still has supporters in both parties.

"A change in Congress doesn't mean market structure reform is parked until the next presidential term. Reform still has supporters on both sides of the aisle, and deals on specific provisions remain possible. What changes is the cost of getting there: more negotiation, more coordination and a slower path to a final bill."

According to the expert, crypto companies will need to engage more actively with lawmakers from both parties rather than relying solely on support from the Trump administration. Meanwhile, the SEC and CFTC will be able to continue regulating the industry under their existing authority. However, such rules could change under a future administration, while comprehensive federal legislation would provide the industry with greater long-term stability.

Can the crypto industry survive the political shift?

The Democrats' victory does not mean the U.S. will return to a tougher approach toward cryptocurrencies. However, further delays to the CLARITY Act could leave the industry without a unified regulatory framework for years. For crypto exchanges, this means continued uncertainty over which digital assets fall under the SEC's jurisdiction and which are regulated by the CFTC. Major investors and companies will have to account for the risk of regulatory changes whenever political power shifts, potentially complicating long-term investment and business development.

The central paradox is that the crypto industry has gained significant political influence but has failed to secure lasting legislative guarantees. Hundreds of millions of dollars spent on election campaigns were not enough to ensure the passage of its most important reform. The industry will now have to seek compromises with both parties. Otherwise, the future of the U.S. cryptocurrency market will continue to depend on election results rather than clear and stable long-term rules.