With the US Midterm Elections 2022 just around the corner (Nov. 8), BeInCrypto examines what a Republican or Democrat win would mean for the crypto market.
During this midterm year, all 435 seats in the House of Representatives will be contested. In the Senate, only 35 out of the total 100 seats available will be put to the polls.
At present, the House of Representatives holds a narrow 8-seat majority in favor of the Democrats. Meanwhile, the Senate is effectively split along party lines, with the Democrats only narrowly in control. Democrats must fight to retain both, as Republicans believe that control of both houses is for the taking.
Republicans or Democrats: Who Wins US Midterm Elections 2022?
In the lead-up to the current election, pollsters have been trying to predict whether the Democrats or Republicans will come on top.
Democrats appear to have the edge early on. Still, Republicans are looking increasingly strong as the election heats up. Key issues of concern to US voters include inflation which remains stubbornly high at 8.2%.
The Democrats have tried to make political capital out of reproductive rights this election. But the issue hasn’t gained much traction with voters as economic pressures have worsened.
Part of the problem for Democrats is that President Joe Biden is not especially popular. Biden’s current rating is at 40%, which is a problem for the wider party as it seeks to hold on to power.
According to pollsters, it now seems more than likely that Biden will lose the House of Representatives. Democrats may do fare better in the Senate and may retain control of the upper house.
If the Democrats lose control of one or both houses, it would make the remainder of Biden’s term more difficult. It could even slow down the pace of legislation or stall it together.
The Impact of a Democratic Win on Crypto
As with many things in politics, the Democrats’ stance on crypto is complex. Within the Democrat camp are crypto-positive representatives such as Ritchie Torres and Jim Himes. This optical party also has highly crypto-critical Senators such as Elizabeth Warren and Sherrod Brown.
Senior party member and former Presidential candidate Elizabeth Warren have been a particularly vociferous opponent of crypto. In May, Warren questioned Fidelity’s decision to allow pension holders to allocate part of their pension provision in crypto. At that time, Warren said, “Bitcoin’s volatility is compounded by its susceptibility to the whims of just a handful of influencers.”
Warren represents a hardcore streak of crypto skepticism within the Democrat party. But more widely, a more nuanced and complex view is taking shape.
In March, U.S. President Joe Biden issued an executive order on crypto, which in general terms, was positive at the time. In September, that framework was brought further forward, with a focus on consumer protection.
The framework did also raise concerns that it might jeopardize further blockchain innovation in the banking sector.
How the Crypto Markets Could React If Republicans Win
The Republicans are generally more pro-crypto than their Democrat rivals. That doesn’t mean a Republican win of the US Midterm Elections 2022 would lead to more crypto-positive legislation anytime soon. The more likely result would be legislative gridlock for the remainder of Biden’s term.
In recent years the red state of Texas has become a major hub of crypto activity and mining. Republicans have pushed back on SEC overreach in the crypto market.
Patrick McHenry and Bill Huizenga expressed concern. In April, they said the Securities and Exchange Commission (SEC) attempted to extend its reach further into crypto.
In an open letter to SEC chief Gary Gensler, the pair said, “We are particularly concerned the proposed rules can be interpreted to expand the SEC’s jurisdiction beyond its existing statutory authority to regulate market participants in the digital asset ecosystem, including in decentralized finance (DeFi).”
Cross-Party Consensus Exists
While political parties tend to make political capital out of their differences, some unity on the subject has been found. Earlier this year, a cross-party bill from Senators Cynthia Lummis (R-Wyo) and Kirsten Gillibrand (D-N.Y.) attempted to balance the needs of both consumer protection and financial innovation.
Crypto proponents will hope that no matter who wins the U.S. midterm elections 2022, such sensible and measured proposals can find a path to passing.
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