A Democratic takeover of Congress may look like bad news for the industry, but Bitwise Chief Investment Officer Matt Hougan believes the bigger picture tells a different story.
While the election could bring short-term market volatility, Hougan said that the changing demographics of Congress matter more to crypto’s long-term prospects than which party holds power.
Importance of Demographics
The latest election put Democrats in control of both houses of Congress, with Elizabeth Warren likely to become chair of the Senate Banking Committee. Given her history of opposing crypto, the development has raised concerns about what could come next for the industry. Hougan, however, does not see the election as a major setback.
According to the lobbying group Stand With Crypto, the incoming Senate has 51 pro-crypto members, compared with 52 in the outgoing Congress. In the House, at least 241 members have received an A or B rating on crypto policy, which gives them a solid majority in the 425-member caucus.
The more interesting change is the age of the lawmakers entering Congress, according to Hougan. Incoming senators are, on average, 14 years younger than those leaving. The number of senators under 50 has nearly doubled, rising from eight to 15. The new House also includes at least 94 Gen Z and Millennial members, a sharp increase from the previous Congress.
This matters because younger generations have shown greater interest in crypto. A Charles Schwab survey found that 33% of Millennials own crypto, compared with just 8% of Boomers. Hougan said that people tend to become wealthier and more influential as they age, eventually taking leadership positions in major institutions. As younger, more tech-comfortable generations move into those positions, crypto could find more support across Congress, regardless of party lines.
He also highlighted the newly elected Texas senator James Talarico as an example. At 37, Talarico will become the youngest senator when he takes office in January. Stand With Crypto has given him an A rating, and he voted twice in the Texas legislature to establish a strategic bitcoin reserve.
That does not mean the road ahead will be smooth. Hougan expects investigations into Trump-linked crypto projects, including Trumpcoin and World Liberty Financial, along with potential risks for prediction markets. He also expects market conditions to remain bumpy over the coming weeks and possibly months.
Democrats to Renew Crypto Push
Last week, House Democrats reportedly began discussing a broader crypto market structure bill that could give the SEC more oversight and introduce tougher rules for digital asset exchanges. The discussions follow their recent midterm election gains and centre on expanding Rep. Maxine Waters’ Crypto Investor and Consumer Bill of Rights, a 2025 amendment to the CLARITY Act.
The proposal could bring back provisions that were left out of the earlier bill, along with measures Republicans had previously agreed to before the legislation stalled in September. The reported changes include giving the SEC a bigger role in market oversight while reducing the CFTC’s authority.
Democrats are also considering stricter custody requirements, monthly proof-of-reserve checks, SIPC-like protection for customer assets and round-the-clock support. The proposal could also include ethics rules targeting crypto activities by President Donald Trump and other federal officials, as well as restrictions on firms trading against their own customers.
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