A Democratic sweep of Congress would end the CLARITY Act's chances for the next two years and sour the political climate for crypto, according to Jaret Seiberg, Washington analyst at TD Cowen, who laid out the firm's view in an election-day note sent to Bitcoin Magazine and clients.

Seiberg wrote that TD Cowen sides with polls and prediction markets in expecting Democrats to take both chambers of Congress, with one caveat: surveys taken a month before the vote, which were more mixed, tend to outperform those taken on the eve of an election.

His bottom line for the industry was blunt: "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 CLARITY Act, the market structure bill that would set jurisdictional lines for digital asset oversight between the SEC and CFTC, passed the House 294-134 in July 2025 and fell short in a Senate cloture vote, 49-50, on Sept. 15 — cloture being the procedural hurdle a bill must clear to reach a final vote. If it does not pass before the new Congress convenes on Jan. 3, it dies and must be reintroduced.

Seiberg added that crypto's influence in Congress may shrink further if Sherrod Brown wins his Ohio Senate race, a contest the industry spent to lose.

In Congress, the Senate is the lever

The note treats Senate control as the bigger prize. A Democratic majority could block Trump's nominees and use that leverage to pressure him to fill Democratic seats on the FDIC, SEC and CFTC, the three agencies at the center of crypto policy.

It could also push the White House to drop its effort to remove Lisa Cook from the Federal Reserve board. Trump could answer with acting chiefs, Seiberg wrote, but that risks handing authority to career staff, an outcome "Team Trump" does not want.

Senate control would elevate Sen. Elizabeth Warren to chair the Banking Committee. Seiberg sees room for populist bills such as interest rate caps, limits on bank buybacks and a government credit score, and he thinks Warren and Trump could find common ground on some of them.

In the House, Rep. Maxine Waters would take the gavel at Financial Services, with a focus on housing and tighter scrutiny of the Federal Housing Finance Agency (FHFA). "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," the note read.

For banks, the note says the election changes little: regulators will keep easing capital, liquidity and tiering rules whichever party wins. Divided government does raise the odds of a shutdown or a debt-ceiling standoff, since Trump is expected to reject spending conditions Democrats attach.

Bitcoin on election day

Bitcoin traded near $77,500 on Tuesday afternoon Eastern time, up from a dip to $76,300 in the morning and about $2,000 below where it opened the month. The price has absorbed a record $6.34 billion Binance hack, two days of spot ETF outflows and a Fed leaning toward a December rate hike.

Prediction markets on Kalshi give Democrats a 94% chance at the House and 74% at the Senate, meaning much of Seiberg's scenario is already reflected in the price.

What is not priced is the lame-duck session, the final stretch before the new Congress is seated on Jan. 3, when the outgoing one can still move legislation. Sen. Angela Alsobrooks, a CLARITY negotiator, has said the bill could pass before January even if a Democratic Congress would not make it a priority afterward. If it fails during that window, she doubts a Democratic-controlled Congress will make it a priority in the future.

According to various reports, crypto groups have spent more than $200 million this cycle to avoid the outcome Seiberg now expects. The CFTC, for its part, moved without Congress on Tuesday, clearing equity perpetual futures for U.S. exchanges. If both chambers flip, that agency-by-agency approach, and who sits on those agencies, becomes the whole game.

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