HTX Chief Analyst Andy: No Need for Excessive Pessimism Over "Divided Congress"; Midterms Are Not the Core Variable for Crypto Markets

November 4 — The results of the 2026 U.S. midterm elections are now largely clear, with Democrats retaking both the Senate and the House of Representatives and the Trump administration entering a "divided Congress" setup. Regarding the potential impact of this outcome on the crypto industry, Andy, Chief Analyst at HTX, believes the biggest change is weakening expectations for regulatory legislation. The already-passed stablecoin bill will not be easily reversed, and long-term trends such as stablecoin payments and RWA remain in place, but advancing market structure legislation such as the CLARITY Act will become markedly more difficult. Over the next two years, the industry will rely more on administrative regulatory reform by the SEC and CFTC rather than legislative breakthroughs in Congress. This means policy certainty for the crypto industry has declined somewhat, and some projects that depend on expectations of regulatory easing may face valuation adjustments.

At the market level, the short-term impact is somewhat bearish, but there is no need for excessive pessimism. On one hand, full Democratic control of Congress may constrain Trump from further expanding fiscal stimulus, weighing on risk appetite for tech stocks and crypto assets; on the other hand, limits on fiscal expansion may also push U.S. Treasury yields lower, creating room for improved liquidity. The election result is not the core variable determining the direction of this market cycle; once political uncertainty is cleared, the market's focus will return to Federal Reserve policy, ETF fund flows and the trajectory of U.S. stocks. In the short term, investors need to watch for volatility and leveraged liquidations, while over the medium term, valuation repair driven by improved liquidity, as well as areas with genuine demand such as stablecoins and RWA, deserve attention.