"The regime is short-lived, but Bitcoin is eternal" - The complex calculations of the U.S. digital asset industry

The Democratic Party's control of Congress shakes pro-Trump strategies
Amid concerns over increased regulation, bipartisan cooperation is sought
"Not too close to Trump, not too far away"

[Block Media Reporter James Jung] "The people are eternal, and the regime is short-lived." The U.S. digital asset industry is reflecting on this saying from Washington. This is because the seemingly impregnable Trump and the Republican Party crumbled in the midterm elections.

With the Democratic Party controlling both the House and Senate, the political calculations of the digital asset industry have become complicated. The industry, which has received full support from President Trump, now faces new risks of increased regulation and congressional investigations. However, there is also a growing recognition that the digital asset industry must continue to grow regardless of the regime's direction.

The key challenge has emerged as whether the industry can break away from pro-Trump strategies and establish a bipartisan cooperation system. This is because Bitcoin is eternal, and the regime is short-lived.

Bloomberg reported on the 7th (local time) that the digital asset industry is coming to an end of the political boom it has enjoyed over the past two years due to the Democratic Party's victory in the midterm elections. With the Democratic Party securing control of Congress, changes to the regulatory easing and legislative strategies that the industry has pursued have become inevitable.

President Trump prioritized digital assets in national policy. He invited industry executives to the White House and pushed for regulatory easing. The Republican-controlled Congress was also friendly to the industry's legislative demands. However, the close relationship between President Trump and the industry has become a double-edged sword. The political controversies surrounding the Trump family's digital asset business have made it difficult to secure support from the Democratic Party.

At the crypto summit held at the White House on the 7th, President Trump (far right) listens to a participant's remarks. Ripple Labs CEO Garlinghouse (second from left) is considered the biggest beneficiary of this summit.

Austin Campbell, an adjunct professor at NYU Stern School of Business, pointed out that "many key figures in the digital asset industry have allied with the Trump family," and "there is a high likelihood that they will pay the price for it."

Democratic Party's control of Congress... from regulatory easing to increased oversight

The biggest variable is the CLARITY Act, a digital asset market structure law. This bill aims to establish a clear regulatory framework for digital asset exchanges and related companies. However, legislative progress stalled in the Senate last September.

The controversy over conflicts of interest surrounding President Trump's digital asset business has emerged as a key issue. Issues such as stablecoin compensation, investor protection, and competition with banks have also obstructed consensus. The Democratic Party is expected to demand strengthened ethical regulations and consumer protection measures in the future. There are also prospects for expanding the SEC's oversight authority over digital assets.

The composition of Congress has also changed. Former Senator Sherrod Brown, who was defeated in the 2024 election due to concentrated opposition from the digital asset industry, has returned by defeating Republican John Husted in the Ohio Senate election. Brown is likely to take on a key role in the Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission (CFTC).

Maxine Waters, a Democratic House member who has criticized President Trump's digital asset business, is also expected to expand her influence in the House Financial Services Committee. Senator Elizabeth Warren is expected to lead the Senate Banking Committee.

Adam Meinhardt, Chief Policy Officer at the Hyperliquid Policy Center, predicts that "the industry will adopt a defensive posture at least initially as it adapts to the new congressional leadership."

With the Democratic Party controlling Congress, the possibility of investigations into President Trump's digital asset business has also increased. President Trump has consistently denied claims that his business interests conflict with his presidential duties.

The regime may change, but the market remains... A test of bipartisan strategies

Just because the political environment has changed does not mean that all existing policy achievements disappear. To abolish the already enacted federal stablecoin law, new legislative procedures are required. The SEC and CFTC's efforts to establish digital asset-related rules can continue under the Trump administration.

However, there remains the possibility that the Democratic Party will use its budget authority and congressional investigative powers to influence the policy direction of regulatory agencies.

The challenges facing the market itself are also significant. Despite the regulatory easing and political support from the Trump administration, Bitcoin is still significantly below its past highs. The fact that Bitcoin prices have fluctuated dramatically under both Democratic and Republican administrations shows that political support does not necessarily align with market performance.

The recent hacking incident at Binance, amounting to $6.3 billion, has once again highlighted security issues. Binance has effectively covered the stolen digital assets using company funds and two insurance funds.

Peter Atwater, an adjunct professor of economics at William & Mary, stated, "The digital asset industry needs to break free from the situation where hacking incidents continue to dominate the news headlines." He analyzed that repeated security incidents could promote the Democratic Party's moves for increased regulation.

Nevertheless, the foundation of the digital asset industry has broadened compared to the past. The business scope has expanded into investment funds, stablecoin payments, and financial infrastructure. Existing financial institutions are also participating in related markets. Within the industry, there are voices calling for a departure from strategies that rely on specific parties or presidents.

Ji Kim, CEO of the Crypto Innovation Council (CCI), stated, "Digital assets have always been a bipartisan issue," and "we are ready to cooperate with both new and existing members of both parties."

The political alliance with President Trump provided the industry with unprecedented opportunities. However, that relationship may also become a burden that hinders long-term institutional integration. Ultimately, the challenge for the U.S. digital asset industry is to build a growth foundation that does not rely on political sponsorship, as the institutionalization of the digital asset market will take a longer time than the regime itself.