Midterm Election Countdown: The Fate of Crypto Legislation and Market Trends

As of December 25, according to Gate market data, BTC/USDT is currently trading at $87,880.8, down 1.77% over the past 24 hours; ETH/USDT has rebounded slightly to above $2,900, at $2,937.59. The Gate Research Institute’s analysis indicates that the crypto market continues to consolidate weakly, with risk appetite remaining low.

Meanwhile, on the political stage in Washington, a legislative battle that will determine the future of the cryptocurrency industry is unfolding. Whether Congress can pass comprehensive cryptocurrency legislation by 2026 has become a focal point for the industry.

01 Political Battle: Funding Surge and Legislative Barriers in the Crypto Industry

The cryptocurrency industry is participating in U.S. politics on an unprecedented scale. According to Bloomberg, super PACs focused on cryptocurrencies are raising approximately $263 million to influence the 2026 midterm elections.

This amount is nearly twice the investment of the largest SPAC, Fairshake, in 2024, and slightly exceeds the total expenditure of the entire oil and gas industry in the previous election cycle.

The primary goal of these funds is to push for the passage of a market structure bill for cryptocurrencies. This legislation would overhaul the digital asset regulatory framework and could grant the Commodity Futures Trading Commission (CFTC) greater authority to be more industry-friendly.

Industry demands extend beyond the market structure bill to include adjustments to cryptocurrency tax policies, anti-money laundering and sanctions rules, and regulatory frameworks for decentralized exchanges.

02 Time Pressure: Government Shutdown and Legislative Window

The legislative process faces urgent time constraints. North Carolina Senator and Senate Banking Committee Republican Thom Tillis warned that Congress may have only a few months left to advance cryptocurrency legislation.

He explicitly stated, “I am not optimistic about making more progress on digital assets, stablecoins, or cryptocurrencies in this Congress.”

The ongoing government shutdown further complicates the legislative process. The shutdown has lasted 36 days, setting a record high, severely delaying Congress’s efforts to pass the market structure bill. Patrick Witt, a digital assets advisor to the White House, noted that although President Trump still demands a final version be submitted before 2025, the large-scale work stoppages across relevant departments have limited the drafting of the bill.

Summer Mersinger, CEO of the Blockchain Association, also acknowledged that the likelihood of the bill passing in 2026 is increasing.

03 Market Status: Crypto Assets Fluctuate Amid Uncertainty

Political uncertainty is directly reflected in market prices. Currently, the overall crypto market is in a weak consolidation phase. Bitcoin is oscillating in the $87,500 - $88,000 range, with technical resistance still present above.

Ethereum is stabilizing around $2,900, rebounding to the $2,950 - $2,970 range, maintaining a generally recovery-oriented trend.

The market fear and greed index remains at 24, indicating “extreme fear,” reflecting investors’ lack of confidence in short-term movements. Meanwhile, OTC selling pressure shows marginal signs of easing, suggesting that large-scale sell-offs are diminishing, and the market may be transitioning from a “concentrated sell” phase to a “wait-and-see and selective allocation” phase.

Notably, some altcoins are performing actively. For example, CXT tokens surged approximately 219.06% in 24 hours, priced at $0.018496; ICNT tokens increased by 16.73%, priced at $0.48522.

04 Partisan Divisions: Republican Support and Democratic Concerns

Cryptocurrency legislation faces clear partisan divides. Republicans generally hold a more friendly attitude toward the industry, while Democrats are more cautious. Sergey Nazarov, co-founder of Chainlink Labs, pointed out that Republicans, including Senate Banking Committee Chair Tim Scott, have explicitly expressed alignment with industry priorities.

In contrast, Democrats raise sharp questions regarding the use of cryptocurrencies in money laundering and decentralized finance. These differences directly impact the legislative process. Cross-party support desired by the industry is difficult to achieve, especially with midterm elections approaching, as both parties tend to adopt opposing stances to solidify their bases.

However, the industry’s massive funding and newfound political influence are forcing at least some Democrats to reconsider their positions. Even previously hardline Democrats like Sherrod Brown of Ohio have softened their criticisms.

05 Outlook for 2026: Election Politics and Policy Adjustments as Dual Variables

2026 will be a critical year for the fate of cryptocurrency legislation. As midterm elections approach, political factors will increasingly influence the legislative process. Caixin’s “2026 New Year Review and Outlook” notes that as Trump begins preparations for the November midterms, his policy adjustments will directly impact various asset performances.

The Trump administration has already incorporated cryptocurrencies into its policy agenda. In March 2025, Trump signed an executive order to include approximately 210,000 Bitcoin held by the federal government into the national strategic reserve. This move demonstrates the government’s emphasis on digital assets and lays the groundwork for further legislation.

However, the seizure of $15 billion worth of Bitcoin from the Chen Zhi telecom fraud group by U.S. authorities has heightened concerns over transaction security. Such security issues could serve as strong arguments against comprehensive crypto legislation, especially among Democrats.

Future Outlook

As of December 25, Bitcoin’s price on Gate has slightly retreated below $88,000, while Ethereum continues to struggle around the critical $2,950 level. These figures are not just fluctuations on trading charts but are a real-time reflection of Washington’s political winds.

With midterm elections approaching, crypto lobbying funds are flooding into Washington, with super PACs totaling $263 million attempting to reshape the legislative agenda. Meanwhile, a record-breaking 36-day government shutdown has stalled bill drafting work.

Senator Thom Tillis’s warning still echoes: “I am not optimistic about making more progress in this Congress.” However, market demand will not wait for political timelines, and investors need to be prepared to move forward amid uncertainty.