Democratic Win Would Block Crypto Bill for Two Years, Analyst Warns

In an election-day memo to clients and Bitcoin Magazine, TD Cowen's Washington analyst Jaret Seiberg wrote that a Democratic takeover of both chambers would kill the CLARITY Act's prospects for two years and worsen the political environment for digital assets.

Seiberg said TD Cowen aligns with polls and prediction markets that point to Democrats winning the House and Senate, but noted that more mixed surveys from a month earlier often prove more accurate than last-minute polling.

He offered a blunt conclusion for crypto: “Democrats will likely investigate Trump including his crypto entanglements. We see this as souring the political environment for crypto, which is why we do not expect the Clarity Act to pass over the next two years.”

The market structure legislation cleared the House by a vote of 294-134 in July 2025 and then fell short in a Senate cloture vote, 49-50, on Sept. 15. Should it fail to pass before the next Congress starts on Jan. 3, the bill will expire and require reintroduction.

Seiberg further noted that the crypto sector's sway in Congress could decrease if Sherrod Brown secures victory in his Ohio Senate race—a contest the industry spent heavily to oppose.

Senate Majority Is the Key Lever

The memo regards Senate control as the more significant prize. With a Democratic majority, Congress could block Trump's nominees and leverage that authority to push him into appointing Democrats to the FDIC, SEC, and CFTC — the three key agencies for crypto regulation.

It might also pressure the administration to abandon its attempt to remove Lisa Cook from the Federal Reserve board. Seiberg noted that Trump could respond by appointing acting chiefs, but that would risk giving control to career officials—a result “Team Trump” hopes to avoid.

A Democratic Senate would put Senator Elizabeth Warren in the chair of the Banking Committee. Seiberg sees potential for populist legislation like interest-rate caps, restrictions on bank share buybacks, and a government-run credit score, and he believes Warren and Trump might agree on certain measures.

Representative Maxine Waters would lead the House Financial Services Committee, prioritizing housing issues and tougher oversight of the FHFA.

The note stated: “That means a focus on housing though we are dubious that she will find GOP support for down payment help and public housing renovations. FHFA scrutiny will increase.”

According to the memo, the election brings few changes for banks: regulators will continue to relax capital, liquidity, and tiering rules regardless of which party prevails. A split government, however, increases the likelihood of a shutdown or debt-ceiling clash, as Trump is anticipated to oppose spending conditions that Democrats impose.

Bitcoin's Moves on Election Day

On Tuesday afternoon Eastern time, Bitcoin was trading around $77,500, recovering from a morning drop to $76,300 and sitting roughly $2,000 below its start-of-month level. The price has weathered a record $6.34 billion hack at Binance, two days of spot ETF outflows, and a Federal Reserve signaling a possible December rate increase.

Kalshi's prediction markets assign Democrats a 94% probability of winning the House and 74% for the Senate, meaning most of Seiberg's outlook is already reflected in Bitcoin's price.

The lame-duck session, however, is not yet priced in. Senator Angela Alsobrooks, a negotiator on CLARITY, has indicated the bill could still pass before January even if a Democratic Congress would not prioritize it afterward. Still, she expressed doubt that a Democratic-led Congress would pursue it later if it fails during that period.

Multiple reports indicate that crypto organizations have poured over $200 million into this election cycle trying to prevent the outcome Seiberg now anticipates. Meanwhile, the CFTC acted on its own Tuesday by approving equity perpetual futures for U.S. exchanges. If control of Congress shifts, the regulatory path forward will depend entirely on the agencies and their appointees.