According to Woofun AI, the balance of victory in the U.S. midterm elections has tilted toward the Democratic Party, but this political landscape has not violently disrupted Bitcoin's price action as the market had expected.
Trading data on the prediction platform Polymarket reveals that as of September 28, the probability of the Democratic Party winning control of both chambers was as high as 61%.
However, the key variable determining market sentiment is not the election itself. Rather, after the U.S. Senate rejected the Digital Asset Market Clarity Act (CLARITY Act) on September 15, Bitcoin actually rebounded.
This counterintuitive market reaction indicates that the stagnation of the legislative process did not constitute a substantive bearish factor, and the core contradiction has shifted from regulatory uncertainty to the suppression of macro monetary policy.
It is worth noting that although Democrats hold an advantage in the elections, Bitcoin's price anchor appears to have detached from the gamesmanship on Capitol Hill and instead closely follows fluctuations in the Federal Reserve's interest rate decisions.
The complex regulatory battle behind the legislative deadlock
The U.S. Senate, as the key decision-making body, directly blocked attempts to clarify the regulatory jurisdiction of different tokens through its rejection.
The bill aimed to clarify the responsibilities of regulatory agencies, but under strong opposition from Massachusetts Democratic Senator and Senate Banking Committee leader Elizabeth Warren, even after the proposers made 126 revisions as required, it still failed to secure a single Democratic vote.
Data compiled by Woofun AI shows that the current regulatory environment is fragmented: the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission are still advancing their respective regulatory work, while the U.S. President has also been accused of obtaining more than $1 billion from the cryptocurrency industry.
To restart the bill, Republicans must make substantive concessions on ethics rules and stablecoin yield issues.
This legislative stagnation and the parallel advancement of regulatory agencies constitute the structural dilemma currently facing the market, forcing industry participants to confront a reality of no unified legal framework but persistently existing regulatory pressure.
In comparison, the dominance of monetary policy is more pronounced.
The Federal Reserve announced on September 16 that it would raise the policy rate to the 3.75%-4% range, a move that directly tightened liquidity.
Among the 18 Federal Reserve officials, 16 expect another rate hike this year, meaning a strict monetary policy environment may persist.
For investors, the impact of legislative obstacles is far less than the rising cost of funds brought by rate hikes.
As early as March, the SEC, with support from the U.S. Commodity Futures Trading Commission, classified Bitcoin as a digital commodity, but this classification is not irreversible, and regulators may still change the designation in the future, thereby triggering long-term stability risks.
Meanwhile, the cryptocurrency industry has not been passively waiting. The Fairshake political action committee launched a $30 million advertising campaign aimed at preventing Ohio Democrat Sherrod Brown from reclaiming his Senate seat.
While this industry counterattack is symbolic, it is difficult to offset the suppressive effect of rising macro interest rates on asset prices.
If Bitcoin cannot hold onto its current gains, the Federal Reserve's policy influence will be further highlighted; conversely, it would indicate that the market's tolerance for high interest rates is increasing.
Looking ahead
The election results on November 3 may be less decisive than the rise in borrowing costs.
Federal Reserve officials' expectations for further rate hikes make monetary policy the core force driving Bitcoin's trajectory.
What remains uncertain is whether traders will view Democratic control of the U.S. Senate as a threat or merely as an established fact.
Regardless of the election outcome, the legislative deadlock is difficult to break in the short term, and the tightening cycle of monetary policy continues.
For market participants, the focus should shift from political gamesmanship to macroeconomic indicators, especially changes in the interest rate path.
Bitcoin's long-term stability depends on whether it can maintain resilience under the double squeeze of high-pressure regulation and tight monetary policy, rather than simply relying on the governing advantage of a particular party.
This trend indicates that the cryptocurrency market is gradually maturing, and its price discovery mechanism relies more on global liquidity conditions than on political events in a single country.
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