How Republican or Democratic wins affect crypto

With the 2022 US midterm elections just around the corner (Nov. 8), BeInCrypto examines what a Republican or Democrat victory will mean for the crypto market.

During this midterm year, all 435 seats in the House of Representatives will be contested. In the Senate, only 35 of the total of 100 available seats will be up for election.

Currently, the House of Representatives holds a barely 8-seat majority in favor of the Democrats, while the Senate is effectively split along party lines with the Democrats only barely in control. The Democrats must therefore fight to keep both parts, while the Republicans will believe that control of both houses is up for grabs.

Republicans or Democrats: Who Wins?

Ahead of the current election, pollsters have been trying to predict whether the Democrats or Republicans will come out on top in this race.

While Democrats were thought to have an early lead, Republicans are looking increasingly stronger as the election heats up. Key issues of concern to US voters include inflation which remains stubbornly high at 8.2%. Democrats have tried to make political capital out of reproductive rights this election, but the issue has not gained much traction with voters as economic pressures have worsened.

Part of the problem for the Democrats is that the president is not particularly popular. Joe Biden’s current approval rating is only at 40%, which is a problem for the broader party seeking to hold on to power.

According to pollsters, it now seems more than likely that Biden will lose the House of Representatives. The Democrats are expected to do better in the Senate and may retain control of the upper house.

If Democrats lose control of one or both houses, it will make the rest of Biden’s term increasingly difficult, slowing the pace of legislation or stalling it altogether.

Democrats on crypto

As with many things in politics, Democrats’ stance on crypto is complex. Within the Democrat camp are crypto-positive representatives such as Ritchie Torres and Jim Himes, as well as highly crypto-critical senators such as Elizabeth Warren and Sherrod Brown.

Senior party member and former presidential candidate Elizabeth Warren has been a particularly vocal opponent of cryptocurrency. In May, Warren questioned Fidelity’s decision to allow pension holders to allocate part of their retirement savings in cryptocurrency. At the time, Warren said, “Bitcoin’s volatility is exacerbated by its susceptibility to the whims of just a handful of influencers.”

Warren represents a hardcore streak of crypto-skepticism in the Democratic Party, but more widely a more nuanced and complex view is taking shape.

In March, President Biden issued an executive order on cryptocurrency that was generally seen as positive at the time. In September, the framework was continued, with a focus on consumer protection. The framework also raised concerns that it could jeopardize further blockchain innovation in the banking sector.

Republicans on crypto

Republicans are seen as generally more pro-crypto than their Democratic rivals.

That doesn’t mean a Republican victory will lead to more crypto-positive legislation anytime soon. The more likely outcome would be a felony for the remainder of Biden’s term.

Over the past few years, the red state of Texas has become a major hub for crypto activity and mining, and Republicans have pushed back on the SEC’s overreach in cryptocurrency.

In April, Patrick McHenry and Bill Huizenga expressed concern about any attempt by the Securities and Exchange Commission (SEC) to further expand their reach into crypto markets.

In an open letter to SEC Chief Gary Gensler, the pair said: “We are particularly concerned that the proposed rules could be interpreted to expand the SEC’s jurisdiction beyond its existing statutory authority to regulate market participants in the digital asset ecosystem, including in decentralized finance ( DeFi ).”

A certain cross-party consensus exists

While political parties tend to make political capital out of their differences, some unity has been found on the subject. Earlier this year, a bipartisan bill from Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (DN.Y.) attempted to balance the needs of both consumer protection and financial innovation.

Crypto supporters will hope that whoever wins the midterms that such sensible and measured proposals can find a way to pass.

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