US Midterm Elections May Shift Crypto Policy, Not Prices
US midterm elections could reshape expectations for crypto regulation, but HTX Research says they are unlikely to determine the market’s direction on their own. Inflation, interest rates and investment flows remain the main near-term drivers. The report expects volatility and selective performance around the vote, rather than a broad rally based on politics alone.
The later analysis adds that the Federal Reserve raised its target rate by 25 basis points in September to 3.75%–4.00%, while inflation remained firm. A stronger yen could also prompt carry-trade unwinds and wider deleveraging. These macro pressures may outweigh optimism about the US midterm elections. The Fed and Bank of Japan were scheduled to meet on 27–28 October and 29–30 October, with US jobs and inflation data due on 6 and 10 November.
Election results could affect the pace of crypto legislation. A Republican hold of Congress may support policy continuity; a divided Congress could delay legislation, while a Democratic majority may bring closer regulatory scrutiny, potentially alongside clearer rules for compliant firms. The GENIUS Act became law in July 2025, but market-structure bill H.R.3633 failed a Senate procedural vote in September.
For traders, Bitcoin (BTC) is a key gauge of macro risk appetite and ETF demand. Ether (ETH) may face a higher hurdle: its spot ETFs recorded net outflows on nine of ten trading days during the period cited. HTX Research describes the market as being in a “capital selection” phase and expects a volatile, selective recovery after the election. A sustained uptrend would require stronger ETF inflows and easing rate expectations.
Neutral
The reports do not point to a clear, immediate price catalyst for either BTC or ETH. In the short term, inflation, restrictive interest-rate expectations, ETF flows and potential yen-related deleveraging are likely to matter more than election headlines. This could keep both assets volatile and leave BTC and ETH vulnerable to shifts in risk appetite; ETH’s reported spot ETF outflows add a specific demand headwind.
Over the longer term, election outcomes could influence the regulatory environment and investor confidence. Clearer rules may support compliant businesses and broader participation, while legislative delays or tighter oversight could weigh on sentiment. However, the reports frame these effects as conditional, not as a guaranteed directional signal. A sustained recovery would need stronger ETF demand and easing rate pressures, so the overall price impact is neutral.