The change in the Speaker of the House of Representatives may impact the encryption industry

Recently, the U.S. House of Representatives experienced a historic transformation. Kevin McCarthy was voted out of his position as Speaker of the House, marking the first time in American history that a sitting Speaker has been removed by vote. Subsequently, Republican Patrick McHenry, who supports the encryption industry, temporarily took over as acting Speaker.

This incident has raised numerous questions, including the selection of the next official Speaker and whether the U.S. government can continue to operate after the temporary funding agreement expires on November 17. These uncertainties could have a profound impact on the encryption industry.

In Washington, there are not many politically friendly figures towards encryption. Mike McHenry, as one of the few pro-encryption lawmakers, threatened to issue a subpoena regarding the communications between Securities and Exchange Commission Chairman Gary Gensler and the now-defunct encryption exchange FTX. Currently, McHenry also serves as the Chairman of the Financial Services Committee, but this position may also change.

Regulatory affairs experts have indicated that if McHenry ultimately becomes Speaker, he will have to give up the chairmanship of the Financial Services Committee. This could result in the committee losing an important encryption supporter, which in turn may affect the advancement of encryption legislation.

Another potential speaker candidate, Tom Emmer, is also a supporter of the encryption industry. However, Emmer stated last week that he has no intention of vying for the position.

In addition to political changes, the market also faces potential threats of government shutdowns. Although the recent crisis has been temporarily alleviated, another deadline will arise in 44 days. This uncertainty may increase market volatility in the short term.

Some analyses suggest that the volatility of traditional risk assets may spill over into the encryption sector, but this impact may be short-lived. Digital assets such as Bitcoin may rebound quickly, as they are often seen as tools for hedging against risks in the traditional financial system.

It is worth noting that the operations of the Federal Reserve will not be directly affected by a government shutdown. However, the market anticipates 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.

The direct reason for McCarthy's removal was his last-minute push to pass a bill to avoid a government shutdown, which sparked dissatisfaction among some far-right members of the Republican Party. The motion for removal was introduced by Republican Matt Gaetz, who demanded that McCarthy disclose the details of the funding agreement reached with the government regarding the Ukraine war.

Overall, this shift in the U.S. political landscape may have profound implications for the regulatory environment and market trends in the encryption industry. Industry insiders need to closely monitor subsequent developments to address potential challenges and opportunities.