Will U.S. Midterms Impact Crypto? Grayscale Says Election Outcome Matters Only 'At The Margins'

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Bitcoinand the broader cryptocurrency industry could continue expanding regardless of which party controls Congress after Tuesday's midterm elections.

Grayscale Sees Limited Midterm Election Risk

In an Oct. 28 report, Grayscale noted that prediction markets favor Democrats taking control of both the House and Senate, potentially ending Republican majorities in Congress.

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A political shift is unlikely to materially disrupt cryptocurrency's long-term growth. Grayscale highlighted three factors supporting its outlook:

• Bipartisan participation

• International adoption

• Institutional integration

Pew Research and The Harris Poll suggest cryptocurrency ownership and usage are broadly similar among Republicans and Democrats.

The GENIUS Act's bipartisan passage highlights cross-party support for crypto.

Also, rising U.S. government debt could strengthen demand for alternative stores of value, including Bitcoin, regardless of which party controls Congress.

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Will Global Crypto Adoption Offset U.S. Political Uncertainty?

Grayscale estimates that U.S. accounts for just 15%-20% of global cryptocurrency activity thereby limiting the industry's exposure to domestic political shifts.

The firm expects growing demand for alternative currencies, efficient payments and supportive international regulations to drive adoption.

Also, regulators outside the U.S. are developing frameworks to encourage blockchain innovation, regardless of Washington's political direction.

Can Institutional Adoption Keep Crypto Growing?

Grayscale highlighted growing institutional adoption, with Visa, Mastercard, Fiservand Stripeexpanding stablecoin infrastructure, while BlackRock, Franklin Templetonand JPMorgan Chaseadvance asset tokenization.

Crypto exchange-traded products have also become increasingly integrated into institutional investment portfolios.

Image: Shutterstock

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