Written by: David Christopher

Translated by: Saoirse, Foresight News

What risks does this midterm election pose for the cryptocurrency industry? As the likelihood of the Democrats sweeping both the House and Senate in the midterm elections continues to rise, I hope to analyze the potential impacts on the future direction of the cryptocurrency industry through existing polls.

To this end, I referred to prediction markets and reviewed materials from Stand with Crypto (SWC), which includes the candidates’ policy positions on the cryptocurrency industry. I integrated this information and constructed an analytical panel based on it.

While the data is still being supplemented and improved, I have built a core database tracking key districts where Democratic candidates are leading and associated their cryptocurrency policy positions with potential influence in congressional committees. This analysis preliminarily reveals the policy landscape for the coming months: While there seems to be potential for collaboration on the surface, deeper investigation reveals structural issues.

The Surprising Reality

It is important to clarify that support for the cryptocurrency industry among Democrats is, in fact, higher than generally expected—at least for certain bills.

In the House of Representatives, 101 Democratic members (about 48% of the caucus) voted in favor of the GENIUS Act; in the Senate, 18 Democrats (40%) voted to push the bill to the voting stage. This seemingly formed a tangible bipartisan support coalition. However, this support is limited to that specific bill; once it reaches the core that truly determines legislative direction—the committee stage—this support vanish.

This is precisely where the problem lies.

The Core Source of Influence

Cryptocurrency-related legislation has never been directly submitted for a full chamber vote.

Whether it is stablecoin regulation, market structure norms, or the delineation of authority for the U.S. Securities and Exchange Commission (SEC), all issues must first be reviewed by committees. The House Financial Services Committee (HFSC) and the Senate Banking Committee are the two core entities that determine the fate of cryptocurrency bills (market structure-related bills also require input from the Agriculture Committee regarding the Commodity Futures Trading Commission (CFTC) authority).

Committee chairs have absolute control over the agenda: deciding which bills hold hearings, which enter the review stage, and which quietly die in procedural stalemates. A chair opposing a bill does not need to vote it down; they simply refuse to schedule it, effectively killing the bill directly.

In recent years, Republican chairs have fully demonstrated the impact of this power:

• Senate Banking Committee Chair Tim Scott pushed the GENIUS Act through the committee and helped it pass in the Senate vote;
• Former House Financial Services Committee Chair Patrick McHenry advocated for the FIT21 Act, making it the first major cryptocurrency market structure bill to pass in the House;
• Current House Financial Services Committee Chair French Hill has continued this momentum, pushing the CLARITY Act and related bills through the House (although the bill remains stalled in the Senate) and continuing to hold hearings on digital assets and capital markets modernization.

So, what changes if the Democrats win the majority?

The majority party will control all committee chair positions in Congress, without exception. If the Democrats regain the House, they will control all House committees; if they take the Senate, they will fully control all Senate committees. Typically, chair candidates within the majority party are determined by seniority.

• House Financial Services Committee: The most senior Democrat is Maxine Waters;
• Senate Banking Committee: The most senior Democrat is Elizabeth Warren.

It is well known that both oppose all major cryptocurrency bills. Warren led the opposition during the review of the GENIUS Act, claiming it "poses a threat to national security"; Waters directly criticized the bill as "a complete cryptocurrency scam."

The key battleground in the House is: once party control changes, subordinate subcommittees will be completely reorganized. The majority party will dominate the allocation of new members' seats and proportional adjustments. Waters will have significant influence over personnel arrangements in the House Financial Services Committee and its subcommittees, including deciding who will oversee "digital asset" related matters. Certainly, she cannot decide all members alone (the party leadership and caucus have a say), but she can steer the committee towards her preferred anti-cryptocurrency position.

Currently, the Democratic camp within the House Financial Services Committee is clearly leaning anti-cryptocurrency: Brad Sherman, Stephen Lynch, Emanuel Cleaver, and Sylvia Garcia all maintain a hardline opposition. Even if there are pro-cryptocurrency members like Jim Himes, Bill Foster, Ritchie Torres, Josh Gottheimer, and Vicente Gonzalez, under Waters' chairmanship, they will not be able to control the agenda.

This chart shows the distribution of cryptocurrency positions in the two core committees if the Democrats regain control of Congress in the 2026 midterms, visually reflecting the regulatory landscape the cryptocurrency industry will face.

The situation in the Senate Banking Committee is slightly better. Although Warren will serve as chair, the committee membership is more diverse: there are pro-cryptocurrency members (such as Mark Warner, Ruben Gallego, Angela Alsobrooks), as well as opponents (such as Tina Smith), and moderates with shifting positions. A slight positive is that if the Democrats control the Senate, Senator Gallego, who has a friendly rating from the SWC platform, is likely to chair the digital assets subcommittee. Although Warren will still control the committee's agenda, Gallego is expected to advocate for pro-cryptocurrency voices at the subcommittee level.

Key Elections That Truly Influence the Landscape

Most existing Democratic members who support cryptocurrency have not entered the House Financial Services Committee or the Senate Banking Committee. They can certainly vote in favor of the relevant bills in the full chamber and press the party leadership (but given that this issue has become highly partisan, most members are reluctant to speak out for the cryptocurrency industry), but they cannot force committee chairs to advance the legislative process.

Only a few elections can genuinely change the power structure of the committees.

This chart analyzes key district races that influence the legislative power regarding cryptocurrency in the U.S. Congress, with data sourced from average predictions on Polymarket and Kalshi, highlighting which election results would directly change the cryptocurrency positions of the House Financial Services Committee (HFSC) and the Senate Banking Committee.

Final Conclusions on the Midterm Elections

The prospects for the House are extremely grim.

The probability of the Democrats regaining the House is as high as 85%, which means Waters will likely chair the House Financial Services Committee, possessing absolute power to reorganize subcommittees and control the legislative agenda. The remaining bright spots are very limited: Menefee is expected to defeat Green for a seat, and Gonzalez is likely to hold onto his current position. These scenarios may create some checks and balances, but cannot change the core of power—the chair position.

The Senate is the last bastion for the cryptocurrency industry, and the situation further deteriorated last night: Juliana Stratton defeated Raja Krishnamoorthi in the Illinois primary. According to SWC platform records, combined with the fact that Fairshake (a Super PAC with ties to the U.S. cryptocurrency industry and one of the most influential lobbying organizations in the cryptocurrency sector) spent $7 million against her, it is safe to conclude that Stratton is a staunch anti-cryptocurrency politician.

What is even more frustrating about the overall landscape is that about 47% of Democratic members in both chambers support the GENIUS Act, and 37% of Democratic members in the House support the CLARITY Act—Democrats who support cryptocurrency do indeed exist. However, the survival of the bills is never determined by a full chamber vote but rather depends on the committees' attitudes. Committee votes on market structure-related bills strictly follow partisan lines. The existing support cannot be translated to the core elements that truly determine legislative direction.

The cryptocurrency industry should not be this partisan. Democrats who support cryptocurrency do exist; they just happen to not be in key positions of legislative power.