Depending on the results of the U.S. midterm elections, passage in Congress of the CLARITY Act, which sets the structure of the digital asset market, could become more difficult over the next 2 years, a forecast said.

According to blockchain outlet Bitcoin Magazine on Oct. 27 local time, TD Cowen's Jaret Seiberg said in a policy note that next week’s election results would determine the schedule for crypto legislation in Congress and the direction of regulation.

The key scenario is Democrats winning both the House and the Senate. Citing prediction-market figures, the note put Democrats’ chances of winning the House at 90 percent and the Senate at 62 percent. TD Cowen assessed this as the most unfavorable outcome for bitcoin and the crypto industry. In that case, Senator Elizabeth Warren would take over as chair of the Senate Banking Committee, and Seiberg identified Warren as a crypto skeptic who has led opposition to the CLARITY Act. Warren was expected to pursue stringent oversight of federal regulators.

The note also said that even if Democrats take control of Congress, it would be difficult to immediately block regulators’ industry-friendly policies. Seiberg said President Donald Trump was expected to maintain a favorable stance toward crypto and could veto bills that limit regulators’ authority. Democrats would struggle to secure the votes to override it. That raised the possibility that policy changes could shift toward tokenisation, perpetual futures and stablecoins.

A second scenario is Democrats holding the House while Republicans retain the Senate. In that case, Senator Tim Scott would keep the banking committee chairmanship. TD Cowen said this could be a better outcome for bitcoin, because Representative Maxine Waters could seek a deal to support parts of a market structure bill in exchange for investor protection measures and her own priorities. By contrast, bills unfavorable to the industry would likely not reach the stage of a presidential signature.

A scenario in which Republicans hold both chambers was described as the least likely but the most favorable for the industry. Based on Kalshi’s prediction market, Republicans had a 10 percent chance of holding the House and a 35 percent chance of holding the Senate. TD Cowen said this would be the best path for crypto policy. It said that the wider the margin in the Senate, the more likely Congress would be to push the CLARITY Act again in 2027 or 2028, and there would also be room to try reviving the bill during a lame-duck session.

If Republicans end up with only a narrow majority, the situation changes. Democrats have continued to demand ethics provisions to prevent senior officials, including the president, from earning profits from crypto businesses, which could send the bill back into deadlock. Seiberg said bitcoin-related stocks plunged when the Senate blocked the bill. That implies the market is sensitive to legislative delays.

The CLARITY Act would establish federal-level rules on digital assets. The House passed its version of the bill in July 2025 by 294 votes to 134. The Senate Banking Committee also advanced its own bill in May 2026 by 15 votes to 9. At the time, 2 Democratic lawmakers voted in favor alongside Republicans.

But the bill did not clear the Senate floor. A cloture vote on Sept. 15 failed 49 to 50. The sticking points were ethics provisions and the profit structure of stablecoins. Democrats argue that senior officials, including the president, should not be allowed to profit from crypto businesses. Republicans and industry groups oppose such restrictions. With both sides accusing the other of blocking progress, the bill remains stalled in Congress.