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

On November 4, the results of the 2026 U.S. midterm elections have largely become clear, with the Democrats reclaiming both chambers of Congress, placing the Trump administration in a “divided Congress” scenario. Regarding the potential impact of this outcome on the crypto industry, Andy, Chief Analyst at Huobi HTX, believes the biggest change is a weakening expectation for regulatory legislation. Passed stablecoin bills will not be easily reversed, and long-term trends such as stablecoin payments and RWA remain intact. However, advancing market structure legislation like the CLARITY Act has become significantly more difficult. Over the next two years, the industry will rely more on administrative regulatory reforms by the SEC and CFTC rather than breakthroughs through congressional legislation. This means a decrease in policy certainty for the crypto sector, and projects that rely heavily on expectations of regulatory relaxation may face valuation adjustments.

On the market front, the outlook is short-term bearish, but there is no need to be overly pessimistic. On one hand, Democratic control of Congress may limit Trump from further expanding fiscal stimulus, thereby dampening risk appetite for tech stocks and crypto assets. On the other hand, constrained fiscal expansion could simultaneously push U.S. Treasury yields lower, creating room for improved liquidity. The election results are not the core variable determining the direction of this market cycle. After political uncertainty clears up, market focus will return to Federal Reserve policy, ETF fund flows, and U.S. equity market trends. Short-term investors should remain vigilant about volatility and leveraged liquidations, while medium-term valuation repairs driven by improving liquidity, as well as sectors with genuine demand such as stablecoins and RWAs, warrant attention.

Note: The content of this article does not constitute investment advice, nor does it offer, solicit offers, or recommend any investment products.