Opinion Change in Speaker of the U.S. House of Representatives may be detrimental to the crypto world.

Change in U.S. House Speaker's opinion could harm crypto world.

Written by: Adam Morgan McCarthy, DLNews

Translated by: Wang Eryu, LianGuaiNews

• Kevin McCarthy has been removed from the position of Speaker of the House.
• Patrick McHenry, a Republican who supports the cryptocurrency industry, has been appointed as the interim Speaker.
• The possibility of a government shutdown still exists. The crypto world may lose an important ally.

On October 3, after Kevin McCarthy was removed from the position of Speaker of the House, Patrick McHenry, who supports the cryptocurrency industry, became the most senior Republican in the House.

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Many issues remain unresolved, including who will be the next Speaker and whether the U.S. government can continue to avoid a shutdown after the temporary funding agreement expires on November 17.

These two lingering questions could have an impact on the crypto world.

In Washington, it is difficult to find allies for the crypto industry, and McHenry is one of the few friendly members of Congress. Last week, he threatened to subpoena Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), regarding his interactions with the collapsing crypto exchange FTX.

McHenry currently also serves as the chairman of the Financial Services Committee, a position that may soon change.

“If Patrick McHenry is forced to become Speaker, he will give up his position as chairman of the Financial Services Committee,” said Sean Tuffy, a regulatory affairs expert and former executive at Citigroup. “This will result in the committee losing someone who supports the crypto industry, which could affect efforts to introduce crypto bills.”

Another crypto ally, Tom Emmer, has been touted as McCarthy’s formal successor. However, Emmer stated last week that he has no intention of seeking the position.

Market Clouds

A potential government shutdown could also pose a threat to the crypto market.

David Duong, Director of Institutional Research at Coinbase, stated in a report on Friday that a government shutdown event could exacerbate volatility in the short term.

“Due to the knee-jerk reactions of market participants, the turbulence of traditional risk assets may spill over into the crypto space, but we believe this anxiety will be temporary,” said Duong, adding that digital assets like Bitcoin should “quickly recover as they often serve as a good hedge against inherent weaknesses in the traditional financial system.”

These issues may temporarily fade away, but the next deadline for a government shutdown is 44 days away, and these issues will continue to loom over the market. (Related reading: The U.S. government is facing another “shutdown crisis”. What impact will it have on the crypto market?)

Importantly, the agreement reached last Saturday means that the Federal Reserve will not be affected. Duong said that a government shutdown would have originally made it difficult for the Fed to obtain key data, such as the inflation report for September.

Although the problem was ultimately avoided, there are still negative factors. Coinbase said the Federal Reserve may continue to raise interest rates at its next meeting on November 1st. This will lay the foundation for a rebound before the end of the year. The FedWatch tool from the Chicago Mercantile Exchange shows a 20% probability of an interest rate hike on November 1st.

Historic Vote

The first vote in U.S. history to impeach the current Speaker of the House of Representatives. McCarthy took office on January 7th this year, becoming the third shortest-serving Speaker in history. At the same time, the government is getting closer to the next shutdown.

On Saturday, McCarthy pushed through a bill to avoid a government shutdown at the last minute, which angered some of his colleagues, especially the far-right Republicans in the House of Representatives.

The impeachment motion was introduced by Republican Matt Gaetz, who demanded that McCarthy disclose the details of his agreement with the Biden administration to provide funding for the Ukraine war through legislation.

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