‘Crypto moves forward regardless’ – Why Grayscale is looking past the U.S. midterms

Grayscale’s Head of Research Zach Pandl believes that the cryptocurrency industry will continue to expand regardless of the outcome of the upcoming U.S. midterm elections.

In a report published on the 28th of October, Pandl argued that even if Democrats gain control of both the House of Representatives and the Senate, the broader outlook for digital assets is unlikely to change significantly.

Zach Pandl’s bullish crypto market prediction

Currently, Republicans hold majorities in both chambers. However, prediction markets suggest that Democrats could take control after the elections.

Such a political shift could influence the regulatory environment for cryptocurrencies, particularly as the industry has benefited from greater regulatory clarity recently.

Furthermore, the years under Joe Biden offer sufficient evidence of a challenging cryptocurrency market. Despite this uncertainty, Pandl believes three major factors will support the industry’s long-term growth.

Factors driving Pandl’s prediction

According to Pandl, cryptocurrency is no longer associated with a single political party.

Research from Pew Research and The Harris Poll suggests that similar proportions of Republicans and Democrats own or use digital assets. Furthermore, legislation such as the GENIUS Act received bipartisan support in Congress, demonstrating that lawmakers from both parties recognize the importance of regulating and developing the sector.

He also highlighted the growing U.S. national debt as a long-term driver of cryptocurrency adoption. This is what Pandl believes would encourage investors to explore alternative stores of value, including Bitcoin [BTC] and other digital assets, as part of their broader investment strategies.

Main players in the U.S. crypto market

That said, Pandl also argued that the cryptocurrency industry does not depend exclusively on the United States. According to Grayscale’s estimates, only 15-20% of global crypto activity takes place in the U.S., while the remaining 80-85% happens internationally.

Hence, Pandl put it best when he said,

Regardless of the outcome of the US midterms, users around the world will continue to seek out alternatives to fiat currencies as well as more effective payment systems, and foreign regulators will continue to put in place rules to support digital assets innovation in their jurisdictions.

Crypto market dynamics paint a confusing picture

Well, the current crypto market dynamics also suggest the same, as the global cryptocurrency market capitalization stood at $2.71 trillion at press time, representing a 1.6% increase over the last 24 hours. Meanwhile, Bitcoin‘s market dominance stood at 60.30% at the time of reporting.

Additionally, the 24-hour trading volume reached $162.455 billion, up 120.9%. However, the market sentiment remains cautious as the Crypto Fear & Greed Index has dropped to 30, indicating ‘fear,’ compared with 51 (neutral) a day ago, 50 last week, and 71 (greed) last month.

This suggests that despite the increase in market capitalization, investors remain uncertain about near-term market conditions.

Lastly, AMBCrypto’s recent report also suggested that Bitcoin’s much-anticipated “Uptober” rally has disappointed investors, with BTC declining 4.2% month-to-date as of 25th October, against its historical average October return of 18.1%.

Still, all of these are mixed sentiments, which suggest that the market is still uncertain with no clear signs of what comes next.

Final Summary

• At present, Republicans hold majorities in both chambers, but prediction markets suggest that Democrats could take control following the elections.
• Only 15-20% of global crypto activity takes place in the U.S., while the remaining 80-85% happens internationally.