Midterm Elections Could Stall CLARITY Act, Test Crypto’s Political Clout

Next week’s U.S. midterm elections could stall the CLARITY Act, a major digital asset regulation bill, and test the crypto industry’s political influence, according to a policy note from TD Cowen.

Analyst Jaret Seiberg warned that the most probable outcome—a Democratic sweep of Congress—would be the most negative scenario for crypto. In this case, Senator Elizabeth Warren, described as a crypto skeptic, would likely chair the Senate Banking Committee and conduct tough oversight, though President Trump’s veto power would block adverse legislation.

A split Congress with Republicans holding the Senate is viewed as a better outcome for Bitcoin, potentially allowing for compromise on market structure rules. A Republican sweep, deemed the least likely, is considered the best path for crypto policy, potentially reviving the CLARITY Act in a lame-duck session or the next Congress.

The CLARITY Act, which would establish federal rules for digital assets, passed the House in 2025 but failed a key Senate vote in September 2026 due to disputes over ethics provisions and stablecoin yields. The crypto industry has reportedly spent $176 million on more than 100 races to influence the outcome.