The balance of power in the United States Congress may shift in favor of Democrats in the 2026 midterm elections, fueled by inflation concerns, threatening to undo regulatory policies under the Republican Party and US President Donald Trump, according to billionaire hedge fund manager Ray Dalio.
“The affordability issue will probably be the number one political issue next year, contributing to the Republicans losing the House and a very messy 2027 on the way to a very interesting 2028 election,” Dalio said, adding:
“Because of how our democracy works, President Trump has a two-year unimpeded mandate that can be weakened greatly in the 2026 mid-term elections and reversed in the 2028 elections. Nowadays, it is rare for one party to be able to stay in power for long.”
The crypto industry is one of the biggest beneficiaries of the Trump administration’s tech-focused policy agenda centered on digital technology and artificial intelligence
A shift in the balance of power threatens to undo the pro-crypto regulatory shift in the US under the Trump administration before key pieces of legislation, including the CLARITY market structure bill, are signed into law.
Related: Trump says he’ll be impeached if Republicans lose midterms
CLARITY Act potentially delayed until 2027, aDemocrats seek to take control of the House
The CLARITY market structure bill may be delayed until 2027 due to Democratic lawmakers who are anticipating a power shift in the 2026 midterms and are delaying a vote until after the elections, according to investment bank TD Cowen.
Republicans currently hold a narrow five-seat majority in the House of Representatives.
The Democratic Party has about a 78% chance of taking control of the House in November, according to traders on prediction market Polymarket.
President Trump, his administration, and pro-crypto lawmakers only had a two-year window to pass crypto regulations, Joe Doll, the general counsel at non-fungible token (NFT) marketplace Magic Eden, told Cointelegraph in 2024.
“The House majority is a real slim margin, and it probably flips because it almost always flips. So you could have a divided government that gets things locked up and frozen in two years,” Doll said.
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