Mon, August 17, 2026 | 12:55PM ET

Crypto WH Meeting, War, Midterms

Key Takeaways

Crypto regulation is on the White House agenda this week despite Congress being on break.

Ethics and partisanship continue to add to doubts as to whether the Clarity Act can become law before the midterm elections.

Meanwhile, issues stemming from the Iran war seem likely to dominate debates in the various midterm election races that could cause control to shift in one or both chambers of Congress.

This Wednesday, President Trump is expected to attend a White House meeting on crypto regulation. There is a growing consensus that the U.S. must develop a regulatory process to ensure that the growing crypto industry doesn’t grow offshore and is regulated by U.S. government agencies. Both the SEC and CFTC will be at the White House-hosted event.

Congress has made some progress in developing a regulatory structure with the House-approved Clarity Act that has been stalled in the Senate. With the announcement earlier in the summer of the large crypto gains made by the president and his family, Democrats have jumped on the need to incorporate tough ethics standards into the Act. To date, the White House has supported an ethics provision that limits government officials’ participation in crypto, but exclusively enforced through the U.S. Department of Justice, which is now under the leadership of President Trump’s former personal lawyer. Democrats believe this has given them a good issue to use in attacking the president’s appearance of conflicts of interest regarding crypto investing. They appear reluctant to resolve the issue prior to the midterm elections.

The legislation got stuck in the Senate, but Leader John Thune (R-SD), prior to the Senate’s summer break, started the process for a Senate vote on Sept. 15 to invoke cloture. This would stop any Democratic filibuster of the Clarity Act and allow the Senate to vote on the bill. To invoke cloture and force a vote requires the support of 60 senators, and at this point it is not clear if there are 60 votes to move to a vote. With the illness of Sen. Mitch McConnell (R-Ky.), there are only 52 Republican senators, and among them are reportedly at least two who oppose the legislation. This would bring the number of Republicans supporting the move to 50, requiring 10 Democrats to support the vote. At this point, with the president’s reluctance to support any bipartisan ethics language, it is not clear if the 60-vote threshold can be met.

In my view there is broad agreement that the U.S. should have a clear regulatory structure for crypto, but the involvement of the president and his family may make a positive vote prior to the midterm election a challenge. The odds may significantly improve once the midterms are over.

War and midterms

The war in Iran will continue to dominate the headlines as the administration continues to search for an exit strategy that opens the Strait of Hormuz and deals with the Iranian nuclear issue. In recent days, the conditions on the USS Abraham Lincoln aircraft carrier have been dominating the headlines, but the situation points to the larger issue facing the U.S. forces being deployed as part of the war effort.

The president last week discussed the issue of higher prices, especially for gasoline. He made clear that he views higher prices as a small price to pay to deal with the threat of a nuclear-armed Iran. This is the most recent White House response to Republican concerns that higher prices are hurting GOP candidates as the midterm elections draw closer.

While Democrats have expressed optimism on capturing the House and potentially making gains in the Senate, redistricting has made several districts less competitive and reduced the number of House seats in play. The current lineup in the House is 219 Rs, 212 Ds, and four vacant seats. With these close numbers it would not take a wide swing to turn the House Democratic, and polls suggest this could happen.

In the Senate, the current margin is 53 Rs to 47 Ds, with 32 seats up on Election Day. The seats in Michigan and Georgia are the two seats currently held by Democrats that Republicans believe they have the best chance of flipping. Democrats see attractive odds for challengers they are backing in North Carolina, Maine, Ohio, Texas, Iowa, and Alaska. Recent polls have also shown that strong Democratic challenges are possible in the Republican states of Kansas and Nebraska. With these well-financed challengers Democrats believe they have a chance of flipping the Senate. But it is a steep climb, and a 50/50 Senate would remain Republican due to the vice president breaking any tie votes.

Disclosures (show)

This research is for the clients of Fundstrat Direct only. Fundstrat Direct Subscription entitles the subscriber to 1 user, research cannot be shared or redistributed. For additional information, please contact your sales representative or Fundstrat Direct at fundstratdirect.com.

Conflicts of Interest

This research contains the views, opinions and recommendations of Fundstrat Direct. At the time of publication of this report, Fundstrat Direct does not know of, or have reason to know of any material conflicts of interest.

General Disclosures

Fundstrat Direct is an independent research company and is not a registered investment advisor and is not acting as a broker dealer under any federal or state securities laws.

Fundstrat Direct is a member of IRC Securities’ Research Prime Services Platform. IRC Securities is a FINRA registered broker-dealer that is focused on supporting the independent research industry. Certain personnel of Fundstrat Direct (i.e. Research Analysts) are registered representatives of IRC Securities, a FINRA member firm registered as a broker-dealer with the Securities and Exchange Commission and certain state securities regulators. As registered representatives and independent contractors of IRC Securities, such personnel may receive commissions paid to or shared with IRC Securities for transactions placed by Fundstrat Direct clients directly with IRC Securities or with securities firms that may share commissions with IRC Securities in accordance with applicable SEC and FINRA requirements. IRC Securities does not distribute the research of Fundstrat Direct, which is available to select institutional clients that have engaged Fundstrat Direct.

As registered representatives of IRC Securities our analysts must follow IRC Securities’ Written Supervisory Procedures. Notable compliance policies include (1) prohibition of insider trading or the facilitation thereof, (2) maintaining client confidentiality, (3) archival of electronic communications, and (4) appropriate use of electronic communications, amongst other compliance related policies.

Fundstrat Direct does not have the same conflicts that traditional sell-side research organizations have because Fundstrat Direct (1) does not conduct any investment banking activities, and (2) does not manage any investment funds.

This communication is issued by Fundstrat Direct and/or affiliates of Fundstrat Direct. This is not a personal recommendation, nor an offer to buy or sell nor a solicitation to buy or sell any securities, investment products or other financial instruments or services. This material is distributed for general informational and educational purposes only and is not intended to constitute legal, tax, accounting or investment advice.
The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.
Intended for recipient only and not for further distribution without the consent of Fundstrat Direct.

This research is for the clients of Fundstrat Direct only. Additional information is available upon request. Information has been obtained from sources believed to be reliable, but Fundstrat Direct does not warrant its completeness or accuracy except with respect to any disclosures relative to Fundstrat Direct and the analyst’s involvement (if any) with any of the subject companies of the research. All pricing is as of the market close for the securities discussed, unless otherwise stated. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, risk tolerance, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies. The recipient of this report must make its own independent decision regarding any securities or financial instruments mentioned herein. Except in circumstances where Fundstrat Direct expressly agrees otherwise in writing, Fundstrat Direct is not acting as a municipal advisor and the opinions or views contained herein are not intended to be, and do not constitute, advice, including within the meaning of Section 15B of the Securities Exchange Act of 1934. All research reports are disseminated and available to all clients simultaneously through electronic publication to our internal client website, fundstratdirect.com. Not all research content is redistributed to our clients or made available to third-party aggregators or the media. Please contact your sales representative if you would like to receive any of our research publications.