Ethereum Price Risks $2,000 as ETFs Record $1.61B in Outflows

Ethereum price approached $2,240 on Oct. 31 as institutional demand weakened and selling continued. U.S. spot Ethereum ETFs recorded approximately $1.61 billion in October withdrawals.

The decline coincided with falling decentralized finance valuations and renewed concerns about U.S. interest rates. Technical analysis also identified a possible bearish reversal pattern.

Odds of Democrats Flipping the Senate and House Have Jumped

As the midterm elections near, most traders and pollsters believe that Democrats are on track to flip the House of Representatives and the Senate. Polymarket places the odds of the party flipping the Senate at 71% and the House of Representatives at 95%.

If this happens, it means that there will be some immediate changes in the crypto industry, which has gone through major shifts in the first two years of the Trump administration.

Odds of CLARITY Act Passing Have Fallen

One of the biggest successes of the Trump administration was the passing of the GENIUS Act, which focused on the stablecoin industry. However, the Senate failed to pass the CLARITY Act, commonly known as the market structure bill.

The CLARITY Act’s main role was to transfer most crypto regulatory duties from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC), which is known for taking a more relaxed approach to regulation.

The Senate failed to pass the CLARITY Act after Democrats and Republicans failed to agree on the social ethical provisions. These provisions were created to prevent President Donald Trump and other politicians from launching their crypto tokens and engaging in corruption.

Therefore, with Democrats retaking either of the house, odds that the CLARITY Act will become law have slumped to just 3%.

Top Crypto Companies to be Investigated

One implication if the Democrats win the House and the Senate is that the they will head key panels with investigation and subpoena powers.

One of the key investigations to watch will be on Donald Trump’s World Liberty Finance, which runs the WLFI token and the USD1 stablecoin.

The Democrats will investigate a $2 billion investment made by the United Arab Emirates (UAE) to Binance using the USD1 stablecoin. That investment has been earning World Liberty millions of dollars since the company invests the reserves in government bonds.

The investment is probably the reason why President Donald Trump decided to pardon Changpeng Zhao. Also, the investment likely violated the emoluments clause of the U.S. Constitution. As a result, there is a risk that Trump will be impeached. Indeed, the odds of his impeachment have jumped on Kalshi and Polymarket.

Democrats will likely investigate the Securities and Exchange Commission (SEC) for its actions on the industry. Also, they will investigate Trump Media & Technology, which is a big Bitcoin holder. The company recently started a service giving hedge funds access to Trump’s posts on Truth Social.

The other potential catalyst for the crypto market will be the resumption of the US-Iran war if Democrats win. If they win, Trump may decide to resume the war to distract from the loss. On the other hand, if Republicans win, it will be a stamp of approval of his war. A resumption of the war will lead to higher oil prices, which will translate to higher inflation. Such a move will affect crypto prices.

This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments involve substantial volatility and potential losses. Readers should conduct independent research before investing.