Above the Seat: A Power Struggle Deciding Crypto Fate

Written by: David Christopher

Translated by: Saoirse, Foresight News

How big are the risks for the crypto industry in this midterm election? As the Democrats’ chances of sweeping both houses of Congress continue to rise, I want to analyze, based on current polls, the potential impact on the future direction of the crypto industry.

To do this, I’ve referenced prediction markets and reviewed sources like Stand with Crypto (SWC), an alliance supporting crypto, which includes candidates’ policy positions on the industry. I’ve integrated this information into an analysis dashboard.

Although the data is still being updated, I’ve built a core database tracking key districts where Democratic candidates lead, linking their crypto policy stances with the potential influence of congressional committees. This preliminary analysis reveals the policy landscape for the coming months: on the surface, there appears to be room for cooperation, but deeper analysis uncovers underlying structural issues.

Unexpected Reality

First, it’s important to clarify that support for the crypto industry among Democrats is actually higher than generally expected — at least on some legislation.

In the House, 101 Democratic members (about 48% of the party caucus) supported the GENIUS Act; in the Senate, 18 Democrats (40%) voted to advance the bill to a vote. This seems to form a genuine bipartisan support coalition. However, this support is limited to that specific bill; once it reaches the core decision-making stage — the committee process — that support disappears.

This is the crux of the issue.

Sources of Influence

Crypto-related legislation has never been directly voted on by the full Congress.

Whether it’s stablecoin regulation, market structure rules, or the SEC’s jurisdiction, all issues must first go through committee review. The House Financial Services Committee (HFSC) and the Senate Banking Committee are the two main bodies that determine the fate of crypto legislation (market structure bills also require input from the Agriculture Committee regarding CFTC authority).

Committee chairs hold absolute control over the agenda: they decide which bills get hearings, which move to review, and which quietly die in procedural deadlock. Chairs opposed to a bill can block it simply by refusing to schedule hearings, without needing a vote.

In recent years, Republican chairs have demonstrated this power effectively:

Senate Banking Committee Chair Tim Scott pushed the GENIUS Act through committee review and helped it pass the Senate vote;

Former House Financial Services Committee Chair Patrick McHenry championed the FIT21 Act, making it the first major crypto market structure bill to pass the House;

Current Chair French Hill continues this momentum, pushing bills like the CLARITY Act through the House (though it remains stalled in the Senate), and holding hearings on digital assets and capital markets modernization.

So, what happens if Democrats win outright?

The majority party will control all committee chairs without exception. If Democrats retake the House, they will control all House committees; if they take the Senate, they will control all Senate committees. Chair selections within the majority party are usually based on seniority.

House Financial Services Committee: the most senior Democrat is Maxine Waters;

Senate Banking Committee: the most senior Democrat is Elizabeth Warren.

Both are known to oppose major crypto legislation. Warren led opposition during the GENIUS Act review, claiming it “poses a threat to national security”; Waters directly denounced the bill as “a complete crypto scam.”

The key battleground in the House is: when party control shifts, subcommittees will be completely reorganized. The majority party will allocate new members and adjust proportions. Waters will have significant influence over personnel decisions in the House Financial Services Committee and its subcommittees, including who handles “digital assets” issues. While she cannot unilaterally decide all members (party leadership and caucus meetings also have a say), she can steer the committee toward a strongly anti-crypto stance.

Currently, the Democratic faction within the House Financial Services Committee is clearly leaning anti-crypto: Brad Sherman, Stephen Lynch, Emanuel Cleaver, and Sylvia Garcia all hold strong opposition. Even if pro-crypto members like Jim Himes, Bill Foster, Ritchie Torres, Josh Gottheimer, and Vicente Gonzalez support crypto, they cannot control the agenda while Waters is chair.

This chart illustrates how, if Democrats regain control in 2026, the positions of the two key committees on crypto will likely shift, directly affecting the regulatory landscape for the industry.

The true pivotal elections

Most Democratic supporters of crypto are not yet on the House Financial Services or Senate Banking Committees. They can vote in full chamber votes supporting or opposing legislation, and pressure party leadership (but given the high polarization, most are reluctant to speak out for crypto). However, they cannot force committee chairs to advance legislation.

Only a few elections can truly change the composition of these committees.

This chart analyzes key districts that influence congressional crypto legislation, based on average data from Polymarket and Kalshi prediction markets. It highlights which election outcomes will directly alter the stance of the House Financial Services Committee and the Senate Banking Committee on crypto.

Final thoughts on the midterm elections

The outlook for the House is extremely grim.

There is an 85% chance that Democrats will retake the House, meaning Waters will likely lead the House Financial Services Committee, with full authority to reorganize subcommittees and set legislative priorities. The few remaining bright spots include Menefee potentially defeating Green for a seat, and Gonzalez likely holding his current position. These may provide some checks and balances but cannot change the core power — the chairmanship.

The Senate is the last stronghold for the crypto industry, but the situation worsened last night: Juliana Stratton defeated Raja Krishnamoorthi in Illinois primaries. Based on SWC data and the fact that Fairshake (a super PAC with a background in U.S. crypto politics and one of the most influential lobbying organizations in the industry) spent $7 million opposing her, it’s clear that Stratton is a staunch anti-crypto politician.

What’s even more frustrating is the overall landscape: about 47% of Democratic senators support the GENIUS Act, and 37% support the CLARITY Act. While some Democrats support crypto legislation, the fate of bills is never decided by full votes but by committee attitudes. Committee votes on market structure bills follow strict party lines. The existing support cannot influence the core decision-making process that determines legislation.

The crypto industry should not be so partisan. While pro-crypto Democrats do exist, they happen not to hold the key legislative positions.