Americans are electing a new Congress today, and not only the future of Donald Trump’s presidency is at stake, but also the direction of regulation of the cryptocurrency market. Bitcoin remains around 77,000. dollars, while over a billion dollars flowed out of American ETF funds in two sessions. Investors are preparing for increased volatility, and the industry is waiting for a decision that may determine the future of the CLARITY Act.
On Tuesday, November 3, Americans vote in the midterm elections known as midterms. They elect all 435 members of the House of Representatives and fill 35 seats in the 100-member Senate. The vote result will determine the balance of power in Congress for the remaining two years of Donald Trump’s second term.
Republicans currently control both houses, but their advantage in the House of Representatives is slim. Pre-election polls indicate a possible Democratic takeover, while the battle for the Senate remains more uncertain. A change in majorities in one or both chambers could make it more difficult for the Trump administration to implement parts of its economic agenda, including planned reforms on digital assets.
This is a particularly important moment for the cryptocurrency market. American legislators have been trying to reach an agreement on new regulations for months, but one of the most important projects, the CLARITY Act, got stuck in the Senate in September. The result of today’s elections may change the conditions for further negotiations, although it will not automatically determine the future price of Bitcoin.
Bitcoin under pressure. Over a billion dollars of outflow from ETFs
The elections are taking place at a difficult time for investors. On Tuesday morning, Bitcoin fell to around $76,300, after which it recovered some of its losses. In the afternoon quotes on November 3, the largest cryptocurrency cost approximately PLN 77,000. dollars, remaining under pressure after previous declines.
The largest contributor to Monday’s result was the iShares Bitcoin Trust (IBIT) managed by BlackRock, with a net outflow of $405.3 million. At the same time, the Fidelity fund saw small capital inflows, showing that not all products were equally affected by the withdrawal.
This data does not prove that investors are selling Bitcoin because of the election. Several factors are currently affecting the market, including the performance of U.S. stock markets, geopolitical tensions and expectations regarding Federal Reserve policy. The recent attack on Binance is also significant, as a result of which cryptocurrencies worth approximately $6.3 billion were stolen.
On Tuesday, Binance management said the exchange had already restored 95% of the assets affected by the incident, using its own reserves and the SAFU hedge fund. This is a declaration by the company itself, which also assures that the situation regarding customer payments has started to return to normal. However, the scale of the theft remains a serious blow to the security and reputation of the largest cryptocurrency exchange.
The derivatives market also indicates an increase in uncertainty. The short-term implied volatility of Bitcoin options covering the period immediately after the election has increased to approximately 51% on an annualized basis. The day before, for options expiring on November 4, it was approximately 43.5%. This indicator does not mean that such a large price change is expected during one session, but it shows that investors value the risk of sudden fluctuations more highly.
CLARITY Act. The US elections may decide the future of regulation
One of the most important issues for the US cryptocurrency industry remains the future of the Digital Asset Market Clarity Act, known as the CLARITY Act. The project is intended to create a comprehensive legal framework for the digital assets market and end the long-standing dispute over which cryptocurrencies are subject to supervision by individual institutions.
Its key assumption is to organize the competences of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The new regulations would also specify the principles of operation of cryptocurrency exchanges, obligations of token issuers and investor protection requirements. For companies operating in the United States, this would mean a more predictable legal environment, although it could also involve additional regulatory costs.
On July 17, 2025, the House of Representatives passed the CLARITY Act by a vote of 294 to 134. The project was supported by 78 Democrats, which showed that the issue of regulating cryptocurrencies is not only a matter of dispute between Republicans and Democrats. However, the agreement could not be maintained during further work in the Senate.
The dispute did not come down to the question of whether cryptocurrencies should be regulated. Democrats demanded, among other things, stronger protections regarding conflicts of interest of politicians involved in cryptocurrency ventures, including projects linked to the Trump family. The controversy also concerned the rules for offering rewards from stablecoins, the protection of the banking sector and the scope of responsibility of supervisory authorities.
Republicans tried to reach a compromise by introducing a modified version of the bill in September. However, the changes were not enough to obtain the required majority, and further negotiations reached an impasse.
The legislative calendar is also important for the industry. If the CLARITY Act is not passed before the end of the current term of Congress, it will be necessary to reintroduce the bill in the next term. The new Congress will begin work on January 3, 2027, and its composition will influence the direction of further talks.
This does not mean that US cryptocurrency regulations are completely at a standstill. In July 2025, Donald Trump signed the GENIUS Act, establishing a federal legal framework for payment stablecoins. The adoption of this law showed that a compromise between parties is possible, although organizing the entire digital assets market remains a much more difficult task.
What do each election scenario mean for Bitcoin?
From the perspective of the cryptocurrency industry, three main scenarios are important.
Maintaining the Republican majority in both houses of Congress would ensure greater continuity of existing legislative priorities. The Trump administration could count on further support for solutions similar to the current version of the CLARITY Act, but the September vote showed that the Republican majority alone does not guarantee the adoption of the act. To break the procedural blockade in the Senate, an agreement with some politicians outside the majority would still be needed.
The situation would be different if Democrats took over the House of Representatives and Republicans retained control of the Senate. Such a division of power would force greater cooperation between the groups and could extend the work on reforming the cryptocurrency market. At the same time, it would create space to develop solutions that would take into account the demands of both parties, especially in matters of investor protection and stock exchange supervision.
The Democrats’ takeover of both chambers would mean a change in the leadership of key committees and the possibility of redefining legislative priorities. Regulations on market transparency, conflicts of interest and obligations of cryptocurrency institutions could become more important. However, it would still be necessary to take into account the position of Donald Trump, who as president would retain the right to veto adopted laws.
None of these variants allows you to clearly predict the behavior of the BTC rate. For some investors, maintaining the current policy direction may mean greater regulatory predictability, but financial markets react primarily to the difference between expectations and the actual result. The decision, which has already been reflected in prices, may not cause significant movements.
For exchanges such as Coinbase and Kraken, what is at stake are the rules of conducting business on one of the world’s largest financial markets. A comprehensive bill could facilitate the development of new products and reduce the risk of regulatory disputes, but its ultimate impact will depend on the requirements adopted. For Bitcoin, the significance of such changes would be primarily indirect, through the availability of services, investor interest and the development of market infrastructure.
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What might happen on election night?
The first polling places in the United States will begin closing around midnight on Tuesday and Wednesday (Polish time). The results will come in gradually, and determining the final balance of power in Congress may take longer, especially if the competition in key states turns out to be even.
For investors, the most important factor will be the reaction of the entire financial market. It is worth monitoring not only the Bitcoin price, but also the quotations of American stock indices, the dollar and treasury bonds. The behavior of the derivatives market and further data on capital flows through ETF funds will also be important.
Sudden changes in quotations may result from both the interpretation of election results and the closing of positions by market participants. Increased volatility does not have to persist for subsequent days. After the uncertainty related to the vote subsides, investors’ attention may once again be dominated by macroeconomic factors and the current situation on the cryptocurrency market.
Today’s elections may therefore trigger a strong reaction from Bitcoin, but their most important consequences for the industry will be spread over months. While the first hours after the announcement of the results will show how investors assess the new balance of power in Washington, the long-term significance of the vote will depend primarily on the future of the CLARITY Act and the ability of American legislators to develop permanent rules for the functioning of the cryptocurrency market.
