With Democrats taking both chambers, industry experts say the Clarity Act is likely dead in its current form. The bill couldn’t clear a procedural Senate vote in September under Republican control, and a fight between banks and crypto firms over stablecoin rewards was never settled. Crypto political action committees spent roughly $170.5 million on the elections, at least $125.5 million of it for Republicans. Views differ on what comes next: some expect more hearings and investigations into crypto firms and President Trump’s crypto interests, while others see an opening for a bipartisan bill with stronger consumer protections and conflict-of-interest safeguards, noting more than 70 House Democrats backed the earlier bill.
Democrats dominated Tuesday’s midterms and are projected to win majorities in both the Senate and House, according to CoinDesk’s overnight tally, with wins including Texas, North Carolina, Kansas and Iowa in the Senate. The crypto industry’s costliest campaign effort — $63 million to defeat former Senator Sherrod Brown in Ohio — failed, with Brown expected to return to the Senate. The industry still has bipartisan friends on Capitol Hill, but should expect a cooler reception from Democratic committee chairs: Elizabeth Warren is likely to lead the Senate Banking Committee, and Maxine Waters may seek the House Financial Services gavel held by French Hill, who was clinging to a narrow lead late in the count. Insiders hope for progress on crypto tax legislation but see little chance of another market structure bill.
Your digital asset holdings could be working harder for you. With in-kind transfers available across 10 Grayscale products, eligible investors can exchange their crypto tokens for shares of the corresponding product — without first selling for cash.
Three core features of in-kind investing:
Put holdings to work. Shares may be eligible for use as margin or collateral. Where listed options are available, they may also help hedge exposure or generate income.
Bring investments together. Incorporate crypto exposure into portfolio management and estate planning, including beneficiary designations.
Simplify safekeeping. Underlying assets are held by institutional cusodians, reducing the burden of storing crypto and managing private keys.
Grayscale Exchange Traded Products (the “ETPs”) are not registered under the Investment Company Act of 1940 (40 Act) and therefore are not subject to the same regulations and protections as 40 Act registered ETFs and mutual funds. The ETPs are subject to significant risk, heightened volatility, and are not suitable for all investors. An investment in the ETPs is not a direct investment in any cryptocurrency.
Extreme volatility of trading prices that many digital assets have experienced in recent periods, and may continue to experience, could have a material adverse effect on the value of the Fund and the shares could lose all or substantially all of their value. Digital assets represent a new and rapidly evolving industry. The value of the ETPs depends on the acceptance of digital assets, the capabilities and development of blockchain technologies and the fundamental investment characteristics of the digital asset. Digital asset networks are developed by a diverse set of contributors and the perception that certain high-profile contributors will no longer contribute to the network could have an adverse effect on the market price of the related digital asset. Digital assets may have concentrated ownership and large sales or distributions by holders of such digital assets could have an adverse effect on the market price of such digital assets.
Converting tokens in kind into Grayscale’s spot crypto ETPs may require selling or swapping tokens into the underlying asset, creating exposure to market impact, slippage, and timing risk. The ETP shares received may trade at a premium or discount to NAV. Tax treatment is uncertain and may trigger taxable events, particularly when contributing assets other than the ETP’s underlying crypto.
Foreside Fund Services, LLC is the Marketing Agent and Grayscale Investments Sponsors, LLC is the sponsor of the ETPs.
A surprise win for Democrat Gina Hinojosa over Republican Gov. Greg Abbott in Texas, who wants to halt new data center approvals until the state adopts rules protecting residents from higher power and water costs, has Wall Street rethinking the AI data center boom. Texas accounts for roughly a quarter of planned U.S. data center capacity, and more than half the power held or planned by the bitcoin miners-turned-AI developers Bernstein covers. Bernstein cut price targets on seven miners by about 35% to 54%, including Cipher (to $15 from $23), IREN (to $55 from $100) and Riot (to $18 from $35). Goldman Sachs expects only temporary pauses, and analysts say miners with approved power already in hand could benefit from scarcer new capacity.
Democrats swept the U.S. midterm elections and took control of both chambers of Congress, and markets staged a relief bounce. Plus: what it could mean for crypto, Musk on AI and space, and Block’s DOJ settlement.
Wednesday, November 4, 2026
Democrats swept the U.S. midterm elections overnight, taking control of both chambers of Congress and delivering a sharp blow to President Donald Trump and his Republican Party with two years left in his term. Markets have so far staged a classic relief bounce with the election uncertainty out of the way: bitcoin is trading well above $78,000, up 1.4% since midnight UTC after dipping below $76,000 in Asian trading, Nasdaq futures are up nearly 1% after falling more than 2% earlier, gold has gained nearly 3%, and the Dollar Index is down 0.44%, touching its lowest level since Sept. 29. Early analyst reactions on what a Democratic-controlled Congress could mean: Tagus Capital says crypto valuations had already absorbed legislative gridlock after the CLARITY Act freeze, and that bitcoin’s commodity status and ETF rails provide a firmer floor; TransFi’s Raj Kamal expects tougher consumer safeguards and stablecoin yield limits in the next draft, though the GENIUS Act takes effect Jan. 18, 2027 either way; Hashkey’s Tim Sun says the Trump administration may face greater political resistance in pushing crypto-friendly policies; and Ebury’s Matthew Ryan calls the result mildly bearish for the dollar. As for price prospects, most experts say sustained gains will require consistent inflows into spot ETFs and a decisive break above $82,000, and until then the recovery warrants caution. Stay alert.
Democrats surge toward Senate, House majorities, with crypto braced for new direction
Democrats are projected to take control of both chambers of Congress after Tuesday’s midterm elections, according to CoinDesk, which notes that some counts were still underway. In the Senate, Democratic wins included Texas, where James Talarico had about 59% at last count, North Carolina, where Roy Cooper also had nearly 59%, as well as Kansas, Iowa and South Carolina, and former Senator Sherrod Brown was expected to win Ohio despite about $63 million in crypto-industry spending against him, the sector’s most expensive campaign effort. In the House, more than a dozen seats flipped toward Democrats in the first hours after polls closed, with analysts projecting a heavy margin. The industry still has supporters on both sides of the aisle, particularly in the House, but CoinDesk reports it can expect a cooler reception from Democratic committee chairs than it had from Republicans over the past two years. Senator Elizabeth Warren is likely to chair the Senate Banking Committee, and Representative Maxine Waters may seek to return to the helm of the House Financial Services Committee, while Republican Representatives French Hill and Bryan Steil, two lawmakers central to crypto legislation, were in tight races, with Hill narrowly ahead and Steil trailing when the article was written. Industry insiders told CoinDesk they are hopeful about a crypto tax bill but less so about another market structure effort.
Elon Musk floats space data centers as Democratic sweep puts pressure on AI trade
AI infrastructure stocks, already down roughly 50% to 60% from their summer highs, face another test after Democrats’ projected win of both chambers of Congress raised fears of tighter restrictions on data center construction. Democrat Gina Hinojosa’s projected victory in Texas heightened those concerns, according to a CNBC report, because she supports a moratorium on AI data centers and Texas accounts for 27% of planned U.S. data center power capacity, per Wells Fargo estimates. CoreWeave, Applied Digital and IREN fell about 3.3%, 3% and 4.3%, respectively, in early trading, though broader stock futures recovered from initial losses and bitcoin traded above $78,000. Elon Musk wrote on X that data centers in space look pretty appealing right now, and investor Chamath Palihapitiya pointed to a broader space investment thesis, noting private investment in space hardware reached about $17 billion in 2025, up from $500 million in 2012. Both have backed Republicans in recent years, CoinDesk noted. SpaceX, which completed its IPO in June, was down around 4% in premarket trading.
Jack Dorsey’s Block faces $764 million DOJ settlement as bitcoin profit plunges 50%
Jack Dorsey’s payments company Block has agreed in principle to pay $764 million to resolve a U.S. Justice Department investigation into its anti-money-laundering controls, a proposed settlement larger than the $566 million profit it reported for the third quarter. Disclosed in a Nov. 3 SEC filing, the agreement would defer for three years a criminal charge alleging that Block failed to maintain an effective anti-money-laundering program as required under the Bank Secrecy Act. The proposed resolution carries a gross monetary component of about $964 million, reduced to $764 million after credits for earlier regulatory settlements, and Block has already set aside the lower amount. The investigation dates to 2023, after a short-seller report by Hindenburg Research alleged that Cash App counted duplicate and fraudulent accounts and had weak identity checks; Block rejected the findings as inaccurate and misleading, and the SEC closed its separate investigation in March without recommending enforcement action. Separately, Block’s bitcoin ecosystem gross profit fell 50% to $52 million in the third quarter from $104 million a year earlier, which the company attributed primarily to reducing fees on certain bitcoin transactions, while overall gross profit rose 22% to $3.24 billion.
CoinDesk Disclosure: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets.
L1.co Disclosure: This material is for informational purposes only, and the content contained herein should not be considered investment advice or a solicitation, offer, or recommendation to sell or buy any asset, strategy, or product. Investing in digital assets involves a high degree of risk, including the loss of principal.
Crypto Daybook Americas: A newsletter from CoinDesk
.webp?upscale=true&width=400&upscale=true&name=Grayscale_Wordmark_Blackberry%20(2).webp)
.jpg?upscale=true&width=1120&upscale=true&name=In-Kind-Investing-email-banner%20500x250@2x%20(1).jpg)
