The crypto industry's $176 million push to shape next week's midterm elections could end up buying itself two more years of legislative gridlock. TD Cowen analyst Jaret Seiberg warned in a policy note that the election results could make it difficult for Congress to pass the CLARITY Act through 2028, with prediction markets pointing to a Democratic sweep as the most likely outcome.
The scenario TD Cowen fears most
Prediction markets cited by the firm give Democrats a 90% chance of winning the House and a 62% chance of winning the Senate. Seiberg calls a Democratic sweep both the most probable and the most negative scenario for bitcoin and the broader crypto sector.
The reason sits in the Senate Banking Committee. Under a sweep, Sen. Elizabeth Warren would take the gavel. Seiberg describes her as a crypto skeptic who has led opposition to the CLARITY Act and expects her to run tough oversight of federal regulators. Kalshi, meanwhile, gives Republicans a 10% chance to keep the House and a 35% chance to keep the Senate.
A split Congress is the softer landing
If Democrats take the House but Republicans hold the Senate, Sen. Tim Scott keeps his Banking Committee gavel. TD Cowen sees that as a better outcome for bitcoin. Rep. Maxine Waters could trade support for parts of the market structure bill in exchange for investor protections and movement on her other priorities. Adverse legislation, meanwhile, would be blocked before it ever reached the president's desk.
Seiberg still expects President Trump to stay favorable toward crypto and to veto any bill that limits his regulators' authority. Democrats wouldn't have the votes to override him. So the policy fight would narrow to tokenization, perpetual futures and stablecoins rather than a broad market structure rewrite.
Where the CLARITY Act stands
The bill 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. Then the floor vote failed.
A cloture motion on the CLARITY Act went down 49-50 on September 15. Bitcoin-related stocks tumbled when the Senate blocked the bill. The sticking points haven't moved since. Democrats want ethics language barring senior officials, including the president, from profiting from crypto ventures. Republicans and industry groups resist it. Stablecoin yield is another dispute. Each side says the other is blocking progress.
The Republican path isn't clean either
TD Cowen calls a Republican sweep the best path for crypto policy, but margins matter. A wider Senate Republican majority would improve the odds that leaders advance the CLARITY Act in 2027 or 2028, and could attempt a revival during the lame-duck session. A narrow majority leaves the bill stalled while Democrats keep pushing the ethics provisions the president opposes.
That leaves the industry's $176 million spread across more than 100 races with no guarantee it moves the one bill it has spent years waiting on. The lame-duck session is the next real window. After that, the calendar and the committee gavels do the talking.
