TD Cowen said a Democratic sweep of Congress would likely kill the CLARITY Act’s chances for the next two years and leave the crypto industry facing a colder political climate in Washington.
In an Election Day note sent to clients and to Bitcoin Magazine, Washington analyst Jaret Seiberg wrote that TD Cowen broadly agrees with polls and prediction markets pointing to Democrats winning both chambers. He added one caveat: polls taken a month before the vote, which were more mixed, have tended to outperform surveys conducted on the eve of voting.
CLARITY Act could lose its path in the next Congress
Seiberg’s conclusion for crypto was direct. Democrats, he wrote, would likely investigate Donald Trump, including his crypto ties. “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 bill passed the House in July 2025 by a 294-134 vote. It then failed a Senate cloture vote 49-50 on Sept. 15. If the bill does not pass before the new Congress convenes on Jan. 3, 2027, it dies and must be reintroduced.
Seiberg also said crypto’s influence in Congress could shrink even more if Sherrod Brown wins his Ohio Senate race, which he described as a contest the industry spent to lose.
Senate control is the main lever
The note treated control of the Senate as the bigger prize. A Democratic majority could block Trump’s nominees and use that leverage to force him to fill Democratic seats at the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, and the Commodity Futures Trading Commission, the three agencies at the center of crypto policy.
It could also pressure the White House to abandon its effort to remove Lisa Cook from the Federal Reserve Board. Seiberg wrote that Trump could respond with acting chiefs, but that would risk shifting authority to career staff, which Team Trump does not want.
If Democrats control the Senate, Sen. Elizabeth Warren would become chair of the Banking Committee. Seiberg said that could open room for populist bills such as interest-rate caps, limits on bank buybacks, and a government credit score. He also said Warren and Trump could find common ground on some of those issues.
House priorities and bank regulation
In the House, Rep. Maxine Waters would take over Financial Services, with a focus on housing and tighter scrutiny of the Federal Housing Finance Agency.
“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 said.
For banks, the note said the election changes little. Regulators would keep easing capital, liquidity, and tiering rules regardless of which party wins. A divided government, however, would raise the odds of a shutdown or a debt-ceiling standoff because Trump is expected to reject spending conditions attached by Democrats.
Bitcoin trading and what markets have priced in
On Election Day, bitcoin traded near $77,500 on Tuesday afternoon Eastern time. That was up from a morning dip to $76,300, but still about $2,000 below where it opened the month.
According to the report, the price has absorbed a record $6.34 billion Binance hack, two days of spot ETF outflows, and a Federal Reserve that is leaning toward a December rate hike.
Prediction market Kalshi put Democrats’ odds at 94% for the House and 74% for the Senate. On that basis, much of Seiberg’s scenario is already reflected in the market.
Lame-duck session remains unresolved
What is not priced in, the report said, is the lame-duck session. Sen. Angela Alsobrooks, described as a CLARITY negotiator, has said the bill could still pass before January even if a Democratic Congress would not make it a priority afterward.
At the same time, she said that if the bill fails in that window, she doubts a Democratic-controlled Congress would make it a priority later.
According to various reports cited in the story, crypto groups have spent more than $200 million in this election cycle trying to avoid the outcome Seiberg now expects.
Separately, the CFTC moved without Congress on Tuesday and cleared equity perpetual futures for U.S. exchanges. The report said that if control of the Senate and Congress flips, that agency-by-agency route, and the people who end up running those agencies, becomes the whole game.
This article first appeared in Bitcoin Magazine and was written by Micah Zimmerman.
