The turmoil in the U.S. House of Representatives may have adverse effects on the encryption industry.

Recently, significant changes occurred in the U.S. House of Representatives, as the current Speaker Kevin McCarthy was ousted. This historic event not only triggered a shock in the domestic political landscape but may also have far-reaching effects on the encryption currency industry.

After McCarthy was dismissed, Republican Patrick McHenry, who supports the encryption industry, temporarily took over as Speaker. However, this situation may not be stable, and the selection of the new Speaker as well as whether the government can avoid a shutdown after the temporary funding agreement expires on November 17 have become unresolved issues.

These uncertainties could impact the encryption world. In Washington, there are not many politicians who truly support the encryption industry. McHenry, as one of the few pro-encryption lawmakers, threatened to subpoena the SEC chairman regarding interactions with a now-defunct encryption trading platform. However, if McHenry ultimately becomes Speaker, he will have to give up the position of Chairman of the Financial Services Committee.

A regulatory affairs expert pointed out that this could lead the Financial Services Committee to lose an important encryption supporter, thereby affecting the advancement of the encryption bill. Another encryption ally of McCarthy, Tom Emmer, also stated he has no intention of seeking the speaker position.

In addition to political factors, the market itself faces uncertainty. Although the risk of a government shutdown has temporarily eased recently, the next deadline will come in 44 days. The head of institutional research at a trading platform believes that government shutdown events may exacerbate market volatility in the short term. However, he also pointed out that digital assets like Bitcoin may quickly recover from such volatility, as they often serve as a good hedge against the inherent risks of the traditional financial system.

It is worth noting that the direction of the Federal Reserve's policy remains the focus of market attention. Some analysts believe that the Federal Reserve may continue to raise interest rates at the meeting on November 1, which could lay the groundwork 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 around 20%.

McCarthy's removal is the first time in American history that an incumbent Speaker of the House has been voted out of office. The immediate trigger for this event was McCarthy's last-minute push to pass a bill to avoid a government shutdown, which sparked dissatisfaction among some far-right Republicans. The motion for removal was introduced by Republican Matt Gaetz, who demanded that McCarthy publicly disclose the details of the agreement made with the government regarding funding for the war in Ukraine.