Crypto groups spent more than $200 million this cycle to prevent exactly what TD Cowen analyst Jaret Seiberg now expects: a Democratic sweep of Congress that would sink the CLARITY Act for two years. The market structure bill passed the House 294-134 in July 2025 and failed a Senate cloture vote 49-50 on Sept. 15. If it does not pass before the new Congress convenes on Jan. 3, it dies and must be reintroduced. Prediction markets on Kalshi give Democrats a 94% chance at the House and 74% at the Senate. The industry's massive spending appears to have bought nothing but disappointment.
Seiberg's analysis is damning for crypto's political prospects. A Democratic Congress would hand Elizabeth Warren the Banking Committee and elevate Rep. Maxine Waters to House Financial Services. More critically, Democrats could block Trump's nominees and use Senate control to force him to fill Democratic seats on the FDIC, SEC and CFTC—the three agencies at the center of crypto policy. Seiberg concluded bluntly: "Democrats will likely investigate Trump including his crypto entanglements. We see this as souring the political environment for crypto, which is why we do not expect the Clarity Act to pass over the next two years."
The lame-duck window offers a narrow escape route. Sen. Angela Alsobrooks, a CLARITY negotiator, has said the bill could pass before January even if a Democratic Congress would not make it a priority after. That said, if it fails during that window, she doubts a Democratic-controlled Congress will make it a future priority. This is crypto's last realistic chance to salvage anything from its $200 million investment.
There is a hard lesson here about political spending in polarized times. The industry threw staggering resources at preventing a Democratic Congress, yet prediction markets suggest that outcome was always likely. Seiberg wrote that TD Cowen agrees with polls taken a month out, which were more mixed, but those forecasting closer to the vote tend to prove more accurate. Crypto groups may have misread the electoral map or simply faced headwinds too strong to overcome.
If Democrats control the Senate, agency-by-agency rulemaking becomes the whole game. The CFTC moved without Congress on Tuesday, clearing equity perpetual futures for U.S. exchanges. This approach—and who sits on those agencies—will define crypto policy when Capitol Hill turns hostile. For an industry that bet $200 million on legislative victory, settling for regulatory scraps is a failure that money cannot fix.