Change of Speaker in the U.S. House of Representatives: The encryption industry may face new challenges

Recently, there has been a significant change in the U.S. political landscape, as House Speaker Kevin McCarthy was removed from office, and cryptocurrency-supporting Republican Patrick McHenry has temporarily taken over. This change could have far-reaching implications for the cryptocurrency industry.

As the chairman of the Financial Services Committee, McHenry has been one of the few allies of the encryption industry in Washington. He has pressured SEC Chairman Gary Gensler to explain the interactions with the FTX exchange. However, if McHenry ultimately becomes the formal speaker, he may have to give up his position as chairman of the Financial Services Committee.

A regulatory affairs expert stated that McHenry's departure could affect the progress of the encryption bill. Another encryption supporter, Tom Emmer, who is seen as a potential successor to McCarthy, currently seems disinterested in the position.

At the same time, the risk of a government shutdown faced by the U.S. government has not been completely eliminated. Although a temporary funding agreement was recently reached, the next deadline will arrive in 44 days. This uncertainty could bring volatility to the encryption market.

David Duong, the head of institutional research at a trading platform, pointed out that the government shutdown could exacerbate market volatility in the short term. He believes that digital assets like Bitcoin may be affected in the initial phase but are likely to recover quickly, as they tend to hedge risks in the traditional financial system well.

It is worth noting that the operations of the Federal Reserve will not be affected by a government shutdown. However, the market still needs to pay attention to the possibility that the Federal Reserve may continue to raise interest rates at the meeting on November 1, which could lay the foundation for a market rebound before the end of the year.

McCarthy's ousting is the first event in American history to remove a sitting Speaker of the House through a vote. He only took office this January, becoming the Speaker with the third shortest term. This change stems from McCarthy's stance on avoiding government shutdown issues, which has sparked dissatisfaction among some of his Republican colleagues, particularly the far-right members.

The motion to impeach proposed by Republican Congressman Matt Gaetz called for McCarthy to disclose the details of the agreement reached with the Biden administration regarding funding for the Ukraine war. This demand ultimately led to McCarthy's downfall.

As the political situation continues to change, the encryption industry may need to reassess its influence and strategies in Washington. Developments in the coming weeks will have a significant impact on the encryption regulatory environment, and industry participants should closely monitor the situation.