The Democrats have won the US midterm elections and are gaining control of both chambers of Congress. The House of Representatives passes to them for the first time in eight years, and Donald Trump, for the first time in his second term, loses the full support of lawmakers. For the crypto industry, the key signal is that the new majority gains the right to conduct investigations, and the first target has already been named: the president's family's crypto projects.

The scale of the Republicans' defeat

The Democrats will take about 255 seats in the House of Representatives, with 218 needed for a majority. This could become the party's largest margin in almost twenty years. In 2022, the Democrats lost the lower chamber and are reclaiming it for the first time since 2018. Three additional seats would have been enough for victory, but they took significantly more — including in districts where Trump won in 2024.

Among the losing Republicans are four incumbent congressmen in Pennsylvania, Jen Kiggans in Virginia, who lost to former congresswoman Elaine Luria, and Richard Hudson of North Carolina, who was responsible in the party for protecting lawmakers during elections. The Democrats also took the Senate.

What the winners promise

Democratic leader Hakeem Jeffries is due to assume the post of speaker on January 3 and will become the first Black politician in that position. Speaking to supporters, he said voters are tired of extremism and corruption. The Democrats' legislative priorities include reversing cuts to the Medicaid program, extending tax credits under the Affordable Care Act, returning authority over tariffs to Congress, and stopping the war with Iran.

Some Democrats promised to initiate a third impeachment of Trump, but there is no unity in the party. Jeffries emphasized that the party rules nothing out and promises nothing.

Trump's reaction

In an interview, the president said he is ready to accept the results and will work with the Democrats. On Truth Social, the tone was different: Trump wrote that his name was not on the ballots, and if it had been, the Republicans would have won by a landslide. He blamed the defeat on Fox News, which, he said, constantly gives airtime to the opposition, and on Texas Governor Greg Abbott, calling him a "Republican in name only." He does have the right to block Congress's laws, so the post looks like a signal to the new majority.

What this means for the crypto industry

Starting in January, the Democrats will lead House committees and gain the right to subpoena witnesses. Robert Garcia, a congressman from California and the future head of the oversight committee, has already named the first target: the Trump family's cryptocurrency projects. By available estimates, they have brought the president more than $1 billion. The list of topics also includes abuses by the ICE immigration service, corporate corruption, and the files in the Jeffrey Epstein case.

For the market, this means several risks: the Trump family's crypto business faces public hearings and possibly legal disputes, which weighs on president-linked tokens; dedicated crypto regulation may be delayed, since any law now requires deals with the Democrats; the budget and judicial confirmations will also go through negotiations, and the risk of a government shutdown will rise; large technology and AI companies may face investigations.

There is another side to it. The Democrats want to limit the president's tariff powers and stop the war with Iran — these very factors were cited as the cause of rising prices in the US, so easing them could reduce pressure on risk assets.

What about the Trump tokens

The president-linked crypto assets responded to the election results with a decline. The WLFI token of the World Liberty Financial project, positioned as an official project backed by Donald Trump, dropped sharply overnight into November 4 from around $0.051 to $0.046, then partially recovered its losses. Over 24 hours it lost 3.14% and is trading at $0.049, while trading volume rose by almost 150%, to $64.88 million. The project's market capitalization fell to $1.56 billion.

The OFFICIAL TRUMP memecoin fell harder. Over 24 hours it lost 4.47% and dropped to $1.50, at one point touching $1.49. The decline began at the same time as WLFI's, when the first voting results became known. The token's market capitalization shrank to $423.63 million on 24-hour trading volume of $212.59 million.

The decline so far fits within the normal volatility of these assets, but it shows how the market perceived the news: investigations into the president's family crypto business are becoming a direct risk for the tokens associated with him.

Reaction of the crypto community

Some users online consider the result good for the economy and called on the market to rally. Others see Trump as a "bearish" factor. Many moved on to the topic of impeachment. Economist Roman Sheremeta noted that Trump himself asked voters to vote as if his name were on the ballot, and they did just that.

Conclusions

Trump went into the 2024 election with a promise to make the US the world center of the crypto industry, and the market grew for two years on those expectations. The administration closed most of the SEC's cases against exchanges, signed the GENIUS stablecoin law, created a strategic bitcoin reserve, and pushed the CLARITY market structure law.

The president also had a personal interest: family crypto projects brought him more than $1 billion. Now that support runs into Congress. The CLARITY law and the rest of the dedicated regulation will not pass without a deal with the Democrats, and hearings on the president's family crypto business will create a toxic backdrop for the industry for months to come.

At the same time, the Democrats are not monolithically against the crypto industry. Some of them voted for GENIUS, and Jeffries promised to follow the facts rather than "investigate like crazy people." A possible easing of tariffs and an end to the war with Iran would remove some of the pressure from risk assets.

Cryptalist analysis: The key risk for the market is not bans but prolonged uncertainty: a divided Congress makes passage of the CLARITY law and other dedicated initiatives unlikely in the next two years, and hearings on the president's family crypto business will put pressure on the tokens associated with him. Institutional investors should build a scenario of regulatory paralysis and heightened volatility in the segment of politically affiliated assets into their models, while an easing of trade and geopolitical tensions could partially offset this negative for the broader market.