Washington's crypto agenda now hinges on next week's midterm elections, according to a policy note from TD Cowen shared with Bitcoin Magazine. Analyst Jaret Seiberg warned that the probable results could make it difficult for Congress to pass the CLARITY Act over the next two years. The bill would set the rules for bitcoin and other digital assets, and the industry has spent $176 million on more than 100 races to shape the outcome.

Because midterms decide which party controls each chamber of Congress, they also determine the committee chairs, the legislative agenda, and the floor votes that will decide whether the bill can advance. The note maps out three scenarios.

A Democratic sweep is the most probable outcome

Prediction markets cited in the report give Democrats a 90% chance of winning the House and a 62% chance of winning the Senate. TD Cowen considers this the most negative scenario for bitcoin and the broader crypto sector. Under it, Sen. Elizabeth Warren would become Senate Banking Committee chair. Seiberg describes her as a crypto skeptic who has led opposition to the CLARITY Act, and he expects her to conduct tough oversight of federal regulators.

Still, Warren cannot stop regulators from adopting policies that favor the industry. Seiberg expects President Trump to remain favorable toward crypto, meaning he would veto any bill that limits his regulators' authority, and Democrats would lack the votes to override him. As a result, policy changes are expected to focus on tokenization, perpetual futures, and stablecoins.

A split Congress with Republicans holding the Senate

The second scenario keeps Democrats in control of the House while key Senate races stay close enough to break for Republicans. Sen. Tim Scott would keep his Banking Committee gavel. TD Cowen views this outcome as a better result for bitcoin, because Rep. Maxine Waters could trade support for parts of the market structure bill in exchange for investor protections and action on her other priorities. Adverse legislation would be blocked from reaching the president's desk.

A Republican sweep is the least likely but best outcome for crypto

Kalshi gives Republicans a 10% chance to keep the House and a 35% chance to keep the Senate. TD Cowen calls this the best path for crypto policy, though the margins matter. A wider Senate majority would improve the odds that leaders advance the CLARITY Act in 2027 or 2028, and they could attempt a revival during the lame-duck session, the period between the election and the seating of the new Congress. A narrow majority, by contrast, would leave the bill stalled, as Democrats keep pushing ethics provisions that the president opposes. When the Senate blocked the bill, Bitcoin-related stocks tumbled.

Where the CLARITY Act stands

For background, the CLARITY Act would create federal rules for digital assets. The House passed its version in July 2025 by a 294-134 vote. The Senate Banking Committee approved its own version in May 2026 by a 15-9 vote, with two Democrats joining Republicans. On the Senate floor, a cloture vote — the step needed to end debate and move toward final passage — failed 49-50 on September 15, leaving the bill short of the 60 votes the threshold requires.

Democrats want ethics language that would bar senior officials, including the president, from profiting from crypto ventures. Republicans and industry groups resist those limits. Stablecoin yield is another dispute, and each side says the other is blocking progress. For now, the bill remains stuck, and the election results will shape whether that changes in the session ahead.

This article first appeared on Bitcoin Magazine and was written by Micah Zimmerman.