Grayscale, BlackRock Say Crypto Adoption to Keep Expanding Even if Democrats Win US Midterms

Grayscale and BlackRock said institutional adoption of digital assets and investor demand are set to continue after the U.S. midterm elections. Rising stablecoin demand outside the U.S. and an established regulatory footing for existing investment products should help cushion the impact of political change.

CoinDesk reported on November 4 that Zach Pandl, head of research at Grayscale, said progress in the digital-asset industry does not hinge on any single administration or Congress. While acknowledging the gains made under the GENIUS Act, he said the foundation for regulatory clarity and institutional adoption of digital assets extends beyond any one piece of legislation.

In research published before the election, Pandl estimated that 80% to 85% of global crypto activity takes place outside the U.S. He pointed to wider use of dollar-pegged stablecoins in Latin America and Southeast Asia. Stablecoin services from Visa, Mastercard, Fiserv and Stripe, along with tokenized funds from BlackRock, Franklin Templeton and JPMorgan, also show the sector moving further into mainstream finance.

BlackRock highlighted the market for investment products that has already taken shape. Speaking at an ETF Investor Forum in New York before election results were announced, Robert Mitchnick, BlackRock's head of digital assets, said Bitcoin and Ether had already secured much of the regulatory clarity needed for investment-product launches. As adoption broadens, crypto becomes a bipartisan issue. He added that the election outcome would have only a limited effect on product launches and fund flows.

Still, uncertainty remains around market-structure legislation. The CLARITY Act did not pass in September even when Republicans controlled both chambers of Congress. If a Democratic-led Congress takes office in January, advancing the current bill could become more difficult. At the same time, more than 70 House Democrats had previously supported related legislation, suggesting there is still room for compromise through a revised bill.

Pandl also pointed to fiscal deficits as a factor supporting long-term demand. Even if control of Congress changes, federal debt is poised to keep rising, which could drive investors toward alternative assets such as crypto.