By Key Points
The outcome of the 2026 midterm elections could have a direct impact on the pro-crypto agenda in Washington.
XRP is at high risk if the pro-crypto agenda gets delayed, blocked, or rolled back by Democrats.
Bitcoin is exposed to a lower level of political risk than other cryptocurrencies and has an important catalyst coming in April 2028.
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If online prediction markets are correct, the Democrats are likely to win back the House and Senate in November. On Polymarket, there’s currently a 53% chance of a Democratic sweep.
If you’re a crypto investor, that outcome could have important consequences for your portfolio. That’s especially the case if Democrats delay, roll back, or block important pro-crypto legislation. With that in mind, here’s one crypto to buy and one crypto to sell.
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One crypto to buy
My one crypto to buy is Bitcoin (CRYPTO: BTC). It is still the most popular cryptocurrency, accounting for a whopping 60% of the crypto market’s total $2.6 trillion market cap. As Bitcoin goes, so goes the crypto market.
As a result, Bitcoin currently has the support of both Wall Street and the White House, so any political fallout from the midterm elections in the event of a Democratic sweep should be minimal. Regulators already agree that Bitcoin is a commodity, not a security. Thus, even if the Clarity Act does not pass this year, it shouldn’t have a direct impact on the regulatory status of Bitcoin and how institutional investors view it.
Image source: Getty Images.
Moreover, Bitcoin is reclaiming its status as so-called digital gold. The correlation between Bitcoin and physical gold has increased in 2026 as investors look for a safe store of value. In fact, the correlation between Bitcoin and gold now sits near an all-time high.
Concerns about the U.S. government’s $40 trillion debt load have refocused traders’ attention on Bitcoin as a potential alternative to fiat currencies. The value of Bitcoin, unlike that of the U.S. dollar, cannot be inflated away by printing more money.
Looking longer term, Bitcoin’s next halving will occur in April 2028, when the reward for mining new coins is cut in half. Historically, this halving event has coincided with the start of new Bitcoin bull market cycles. As a result, I’m expecting momentum for Bitcoin to intensify throughout 2027, before reaching a crescendo in late 2028. This has been the pattern with Bitcoin through four previous halving cycles (2012, 2016, 2020, and 2024).
One crypto to sell
My one crypto to sell is XRP (CRYPTO: XRP). If there’s one cryptocurrency that is most exposed to political risk from the midterm elections, it’s XRP.
For good reason, Ripple — the company behind the XRP token — has been one of the most vocal champions of the Clarity Act. From Ripple’s perspective, the Clarity Act is an important piece of legislation, since it will help to clear the way for an end-to-end blockchain payment system powered by XRP.
Ripple has spent nearly $3 billion on blockchain- and crypto-related acquisitions during the past few years, all aimed at taking blockchain payments mainstream. That may not happen if the current pro-crypto agenda gets blocked, delayed, or rolled back. Simply put, financial institutions and banks may be unwilling to adopt the Ripple payment network if they perceive political or regulatory risk.
In a worst-case scenario, a clean sweep of the House and Senate could mean that the next chance to pass the Clarity Act will occur in 2030. Even Senator Cynthia Lummis (R-Wyoming), one of the most influential pro-crypto politicians in Washington, has admitted as much.
That’s why I’m not impressed by XRP’s recent mini-rally to about $1.40. Most likely, it’s going to start giving back those gains during the next few months as the political reality sets in.
In part, that’s because the long-term trend is for blockchain payment networks to use stablecoins rather than an altcoin like XRP. That’s bad news if you’re investing in XRP, but good news for the stablecoin Ripple USD (CRYPTO: RLUSD). Last year, blockbuster stablecoin legislation (the Genius Act) passed, significantly raising the profile of stablecoins.
A crypto market or a market of cryptos?
On Wall Street, it’s popular to ask, “Is this a stock market or a market of stocks?” In other words, should you just buy the whole market, given that everything is going up, or should you hunt for the beaten-down values and hidden gems?
If the Democrats win back both the House and the Senate, I expect the crypto market to become a market of cryptos. The whole crypto market won’t go up at the same time, and investors will need to be a lot smarter about which cryptocurrencies they add to their portfolios. With that in mind, I’m buying Bitcoin and selling XRP.
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Dominic Basulto has positions in Bitcoin and XRP. The Motley Fool has positions in and recommends Bitcoin and XRP. The Motley Fool has a disclosure policy.
