Democrats are favored to sweep the US midterms on November 3, and Bitcoin (BTC) may react less than crypto expects. Traders on prediction market Polymarket gave them 61% odds of winning both chambers on September 28.
The Senate is the real swing factor. On September 15, it blocked the Digital Asset Market Clarity (CLARITY) Act. The bill would settle which regulator oversees which tokens.
Why a Democratic Midterms Win May Already Sit in Bitcoin’s Price
Bitcoin rallied after the hike and the failed vote, so Congress does not appear to be steering the price. The Federal Reserve (Fed) raised rates to a 3.75%-4% range on September 16, its statement shows. Meanwhile, according to CNBC, 16 of 18 officials expect another increase this year.
For investors, the takeaway is that monetary policy, not legislation, looks like the bigger driver of bitcoin right now. With 16 of 18 officials expecting another hike this year, tighter conditions could persist and test the rally. If Bitcoin holds its gains, that would suggest buyers are looking past higher rates. If it fades, the Fed may prove the stronger influence.
Why the Senate Gavel Matters More Than the House
Senator Elizabeth Warren, D-Mass., is the CLARITY bill’s most vocal opponent, and as the Senate Banking Committee’s top Democrat, she would normally be in line to chair it and set its agenda.
Indeed, no Democrat voted yes, even after sponsors made 126 changes at their request. Any push to revive the CLARITY Act would still need Republican concessions on ethics and stablecoin yield.
Bitcoin’s footing is firmer than the bill’s. In March, the Securities and Exchange Commission, joined by the Commodity Futures Trading Commission, named it a digital commodity. However, a future commission could withdraw that interpretation, so durability is the real exposure.
At the same time, crypto is fighting back. Fairshake, a crypto super political action committee (PAC), opened a $30 million ad campaign. It targets Democrat Sherrod Brown’s bid to reclaim his Ohio Senate seat.
Therefore, rates may prove the tougher test. Fed officials project more hikes, so November 3 could matter less than borrowing costs. The open question is whether traders will treat a Democratic Senate as a threat or a known quantity.