Changes in the Speaker of the House may have a negative impact on the encryption field

Recently, the U.S. House of Representatives experienced a political storm, with Kevin McCarthy being removed from the position of Speaker of the House. This historic event could have far-reaching implications for the encryption industry.

After McCarthy was removed from office, Republican Patrick McHenry, who supports the encryption industry, temporarily took over as Speaker of the House. However, this change has sparked many uncertainties, including the selection of the next official Speaker and whether the U.S. government can continue to operate normally after the temporary funding agreement expires on November 17.

These pending issues could impact the encryption currency sector. In Washington, there are not many politicians who truly support the encryption industry, and Mike Henry happens to be one of them. He not only has a friendly attitude towards encryption but also threatened to subpoena Gary Gensler, the chairman of the U.S. Securities and Exchange Commission, regarding his dealings with the now-defunct encryption exchange FTX.

Currently, McHenry also serves as the chairman of the Financial Services Committee. However, if he is ultimately elected as the official Speaker, he will have to give up this position. Regulatory affairs expert Sean Tuffy pointed out that this could result in the Financial Services Committee losing a supporter of the encryption industry, which in turn could affect the progress of related legislation.

Another person considered a possible successor to McCarthy, Tom Emmer, is also an ally of the encryption industry. However, Emmer stated last week that he has no intention of seeking the speakership.

In addition to political personnel changes, the potential risk of a government shutdown has cast a shadow over the encryption market. David Duong, the head of institutional research at a trading platform, believes that government shutdown events may exacerbate market volatility in the short term. He pointed out that the turmoil in traditional risk assets could spill over into the encryption sector, but this impact may be temporary. Digital assets like Bitcoin are expected to recover quickly, as they often serve as a good hedge against the inherent risks of the traditional financial system.

Although the recent temporary agreement has temporarily avoided a government shutdown, the next deadline will arrive in 44 days, and this uncertainty will continue to affect the market. Notably, the agreement reached last week ensures that the Federal Reserve will not be impacted, allowing it to continue obtaining key economic data.

However, the Federal Reserve may continue to raise interest rates at the meeting on November 1, which will lay the foundation 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 about 20%.

McCarthy's removal is the first time in U.S. history that a sitting Speaker of the House has been voted out of office. He just took office in January this year, making him the third shortest-serving Speaker. The immediate reason for his removal was his last-minute push to pass a bill to avoid a government shutdown, which angered some far-right Republican lawmakers.

The motion to dismiss was proposed by Republican Matt Gaetz, who called for McCarthy to disclose the details of the agreement reached with the Biden administration regarding funding for the Ukraine war. This event not only reflects the internal divisions within American politics but also highlights the complex environment that the encryption industry faces in policy-making.