Changes in the Speaker of the U.S. House of Representatives May Affect the Development of the Encryption Industry

Recently, significant changes have occurred in the U.S. political arena, with Kevin McCarthy being removed from the position of Speaker of the House. This event has not only shaken the political sphere but may also have far-reaching implications for the encryption currency industry.

Currently, Republican Patrick McHenry, who supports the encryption industry, temporarily takes over as speaker. However, many issues remain unresolved, including the candidate for the next official speaker and whether the U.S. government can avoid a shutdown after the temporary funding agreement expires on November 17. These uncertainties could have significant effects on the encryption world.

In Washington, there are not many politicians who truly support the encryption industry. Mike McHenry is one of the few pro-encryption lawmakers. He has threatened to subpoena the chairman of a regulatory agency over its dealings with a failed encryption exchange. Currently, McHenry also serves as the chairman of the Financial Services Committee, but this position may soon change.

A regulatory affairs expert pointed out that if McHenry is forced to assume the role of official chairman, he will have to give up his position as chairman of the Financial Services Committee. This could result in the committee losing an important supporter of the encryption industry, which in turn could affect the advancement of related legislation.

Another ally of McCarthy, Tom Emmer, who is seen as a potential successor, also expressed no intention to seek the Speaker position. This further increases the uncertainty of the situation.

In addition to political changes, the looming threat of the government potentially shutting down also poses a risk to the encryption market. The head of institutional research at a certain cryptocurrency trading platform stated that government shutdown events could exacerbate market volatility in the short term. Although the turbulence in traditional risk assets may spill over into the encryption space, digital assets like Bitcoin may recover quickly, as they tend to hedge well against the inherent risks of the traditional financial system.

Despite the recent political turmoil subsiding temporarily, there are only 44 days left until the next potential government shutdown deadline. These issues will continue to put pressure on the market. Notably, the agreement reached last week means that the Federal Reserve will not be affected, as it can still obtain key economic data.

However, there are still other unfavorable factors. Some analysts believe that the Federal Reserve may continue to raise interest rates at its next meeting on November 1, which could lay the groundwork for a market rebound before the end of the year. Currently, the market expects the likelihood of an interest rate hike on November 1 to be around 20%.

The vote to remove McCarthy is historically significant, as it is the first time in U.S. history that a sitting House Speaker has been removed through a vote. McCarthy took office in January of this year, becoming the third shortest-serving Speaker. The motion to remove him was introduced by Republican Matt Gaetz, who demanded that McCarthy disclose the details of the funding agreement for the Ukraine war reached with the government.

This series of political changes and potential economic uncertainties will continue to affect the cryptocurrency market. Industry participants need to closely monitor developments in Washington and the impact these changes may have on encryption regulation and the market environment.