Crypto Bills at Risk as Dalio Predicts Democrats Win House in 2026

TLDR

• Hedge fund billionaire Ray Dalio forecasts Democrats will likely capture House control in November 2026 midterm elections
• Gold outperformed the S&P 500 by 47% in 2025 as the US dollar dropped 39% against the precious metal
• The US faces nearly $10 trillion in debt rollover while the yield curve reaches its steepest level since 2021
• Pro-crypto CLARITY Act faces potential delay until 2027 if Democrats win the House majority
• Bitcoin could reach $130,000 in Q1 2026 once capital shifts from precious metals back to crypto assets

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Bridgewater Associates founder Ray Dalio expects the 2026 midterm elections to flip House control to Democrats. The shift could halt progress on crypto-friendly legislation under the Trump administration.

Dalio points to affordability concerns as the driving force behind potential Republican losses. He expects these issues to dominate voter concerns in the November elections.

Polymarket traders currently price in a 78% probability of Democrats winning House control. Republicans hold just a five-seat advantage in the chamber.

The crypto sector has benefited from Trump’s technology-focused regulatory approach. However, a Democratic House could block pending legislation before it becomes law.

Key Crypto Bill Faces 2027 Delay

Investment bank TD Cowen reports the CLARITY Act may not advance until 2027. Democratic lawmakers appear to be waiting for expected midterm gains before voting on the bill.

Magic Eden’s general counsel Joe Doll previously told Cointelegraph that crypto advocates face a narrow two-year window. “The House majority is a real slim margin, and it probably flips because it almost always flips,” he explained.

Dalio notes that President Trump has a two-year unimpeded mandate. This window can be weakened in the 2026 midterms and reversed in 2028 elections.

The US dollar experienced severe weakness in 2025. The currency declined 39% versus gold, 12% against the euro, and 13% against the Swiss franc.

Gold delivered 65% returns in dollar terms during the year. This performance beat the S&P 500 by 47 percentage points.

The S&P 500 actually fell 28% when measured in gold terms. European equities outperformed US stocks by 23% while Chinese stocks gained 21% more.

Bond Market Signals Stress

The US Treasury yield curve entered 2026 at its steepest since 2021. The gap between two-year and 30-year bonds reached 140 basis points, according to Bitfinex.

Markets expect the Federal Reserve to cut policy rates. At the same time, investors demand higher compensation for long-term government bonds due to inflation concerns.

Dalio highlights that nearly $10 trillion in US debt requires rollover. Fed easing to lower real rates makes these debt assets less attractive to investors.

Trump administration policies include stimulative fiscal measures and deregulation to boost manufacturing. These moves aim to revitalize US industrial capacity.

The shift from multilateralism to unilateralism in 2025 increased geopolitical tensions. This change drove demand for gold as a safe haven asset.

Gold prices rose 69% while silver surged 161% over the past year. VALR CEO Farzam Ehsani told Cryptonews this precious metals rally has delayed crypto gains.

Bitcoin and Ethereum remain range-bound as capital flows into gold and silver. Long-term Bitcoin holders stopped selling for the first time since July.

Ethereum fundamentals continue improving with a cleared staking exit queue. The network also processes record transaction volumes at historically low fees.

Ehsani projects Bitcoin could hit $130,000 and Ethereum $4,500 in Q1 2026. These targets depend on precious metals momentum fading and capital rotating back to crypto markets.

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