TD Cowen Warns Democratic Congress Would Sink CLARITY Act
Analyst Jaret Seiberg says a Democratic sweep could stall the CLARITY Act for two years, shape key committees, and impact crypto policy.
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According to Washington analyst Jaret Seiberg at Cowen, a Democratic sweep of Congress could halt the CLARITY Act for the next two years. In a recent note, Seiberg indicated that political conditions for the crypto sector would likely sour, noting that Democrats might also investigate Donald Trump regarding his digital asset interests. The market structure legislation previously cleared the House in July 2025 by a 294 to 134 margin, but subsequently stalled after failing a Senate cloture vote on September 15. If the bill fails to pass before the new Congress convenes on January 3, it will expire and require reintroduction.
Prediction markets on Kalshi currently assign high probabilities to Democrats securing both the House and the Senate, meaning a significant portion of this scenario may already be factored into digital asset valuations. Bitcoin traded near $77,500 following a morning dip to $76,300, absorbing recent market events including spot exchange-traded fund outflows, a major hacking incident, and shifting Federal Reserve rate expectations. Meanwhile, crypto advocacy groups have directed substantial funds into the election cycle to prevent the outcome outlined by the analysis.
Control of the Senate remains a crucial factor, as a Democratic majority could block presidential nominees and pressure the White House across key regulatory bodies like the SEC, CFTC, and the Federal Deposit Insurance Corporation. Furthermore, a Senate takeover would elevate Senator Elizabeth Warren to chair the Banking Committee, opening the door for various populist legislative proposals. Concurrently, Representative Maxine Waters would lead the House Financial Services Committee with a renewed emphasis on housing oversight and stricter scrutiny of the Federal Housing Finance Agency.
A Democratic sweep of Congress could delay the CLARITY Act for two years and shift regulatory appointments.
Why it matters
This political shift directly influences the legislative roadmap for digital assets, altering how regulatory agencies approach industry oversight and leadership appointments. While market participants navigate these policy developments, the outcome determines whether comprehensive market structure rules advance or stall in the legislative pipeline.