“That’s not necessarily negative for institutional adoption. Large investors can operate within demanding regulatory frameworks,” Varghese told Crypto Briefing.
“What they struggle to price is uncertainty over which regulator has jurisdiction and whether the rules will survive the next administration. The bigger risk is another two years of regulatory fragmentation while capital and innovation continue flowing toward jurisdictions offering more predictable conditions,” he said.
Varghese said the CLARITY Act, which failed to advance in the Senate after a 49-50 vote in September and requires Democratic backing to pass, could face renewed negotiations in 2027 as lawmakers revisit consumer protections, conflicts of interest and the respective roles of the SEC and CFTC.
He said a narrower framework addressing custody, token classification and secondary-market activity may be more attainable than a comprehensive bill.
“There’s a competitive cost to delay. Capital is already looking at tokenized assets, decentralized compute and AI infrastructure as investable markets. If American policymakers spend another year debating jurisdiction, the underlying technology and investment opportunities won’t wait for Washington,” he warned.
While election results and other political developments can cause immediate volatility in crypto markets, Varghese said macroeconomic factors play a greater role in determining longer-term performance. Interest rates, dollar liquidity, credit conditions and institutional risk appetite shape the amount of capital available to sustain market moves.
He added that investors are increasingly distinguishing speculative assets from infrastructure with measurable adoption, including decentralized AI networks whose compute usage and operating economics can be assessed.
Crypto executives are also preparing for possible stablecoin yield restrictions under a Democratic-controlled Congress, with the next round of US crypto legislation likely to face tougher requirements, according to Raj Kamal, founder and CEO of TransFi.
“The more meaningful date for payments is January 18, 2027, when the GENIUS Act takes effect alongside the OCC’s final rule. From then, issuing a payment stablecoin in the US requires a federal or state licence, with reserve and redemption standards attached. That framework is already law, whatever the result,” Kamal stated.
He said the rules will have a more immediate impact on businesses handling cross-border payments than the broader legislative negotiations.
On the market side, Bitcoin has historically declined in the fourth quarter of midterm years, with losses of 43.5% in 2018 and 14.8% in 2022, Kamal noted. However, he argued that this year’s market structure is different, with spot ETFs and corporate treasuries playing a larger role in demand.
“The dollar side of the market also looks sturdier. Stablecoin supply sits around $300 billion, within about 6% of its May record. That points to settlement activity running on its own cycle, and I’d expect any post-election dip to be shallower than in 2018 or 2022,” the TransFi chief said.
