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Divided government is best for crypto in November election, says TD Cowen
According to TD Cowen, a Democratic or Republican takeover of executive and legislative power in the November elections could pose greater risks for cryptocurrencies. “A divided government is the best possible outcome for financial companies, housing and cryptocurrencies as we believe there would be bipartisan legislative and regulatory agreements that could survive future political changes,” TD Cowen’s Jaret Seiberg wrote in a note Monday. “If Biden wins, a Republican Senate could limit his ability to put aggressive regulators in power,” Seiberg added. “Trump would likely have a Republican Senate, but House Democrats could block his legislative agenda. The risk increases broadly for both outcomes if either party wins the election.” The election has become a topic of growing interest for cryptocurrency investors, after the industry’s political fortunes seemed to suddenly change about a month ago and as former President Donald Trump sought to position himself as the most cryptocurrency-friendly candidate in his application. for re-election. Republican politicians tend to have more favorable views of cryptocurrencies, but the digital currency industry maintains that cryptocurrencies are a nonpartisan issue. Last month, the House of Representatives passed a crypto infrastructure bill (FIT 21, or Financial Innovation and Technology for the 21st Century Act) by a bipartisan vote, 279-136. Many hailed it as a historic victory and as evidence of the growing importance and understanding of cryptocurrencies in Washington. If President Biden wins a second term with a Republican Senate, a bipartisan cryptocurrency market structure bill is likely to pass next year or in 2026, “with a focus on investor protections for tokens that do not they are commodities,” according to Seiberg, a real estate and financial services company. political analyst for TD Cowen’s Washington Research Group. “We see this as a positive for cryptocurrencies, despite Team Biden’s sometimes hostile views,” he said. “The downside is that it probably means SEC Chairman Gary Gensler will stay until at least 2026.” Gensler has become an adversary of the cryptocurrency industry, which has long been frustrated by the Securities and Exchange Commission’s refusal, under his leadership, to provide clear guidance for U.S. crypto firms, choosing instead to regulate through enforcement, he says the industry. Meanwhile, if Trump were to champion his new brand as a “powerhouse of cryptocurrencies,” Seiberg said, it would suggest “that he will support the bipartisan cryptocurrency market structure bill and appoint regulators who will focus more on guiding and less on the application”. —CNBC’s Michael Bloom contributed reporting.