Crypto's $100 million midterm warning: Fair Shake PAC backs 32 House candidates across party lines
A solo commentary episode from the Digital Asset News channel covering crypto political action committee spending ahead of the 2026 US midterms, CFTC regulatory developments, and China's growing peer-to-peer crypto economy.
Summary
The host covers Fair Shake PAC's announcement that it will spend over $100 million supporting 32 House candidates — 19 Republicans and 13 Democrats — in the 2026 US midterm elections, framing it as a direct response to the failure of the Digital Asset Market Clarity Act in the Senate. He argues that crypto's political spending power is now large enough to meaningfully shift election outcomes, and that the industry is rewarding loyalty across party lines rather than defaulting to one side. He also covers CFTC Chairman Michael Celig's new regulatory framework — Regulation CTX and Regulation CAM — which establishes federal oversight of crypto markets in the absence of congressional action, and names Bitcoin, Ethereum, Solana, XRP, and others including Stellar and Tezos as digital commodities. Finally, he presents Chainalysis data showing China's peer-to-peer crypto economy reached $176 billion in the 12 months through June 2026, with monthly activity growing from $240 million to $5 billion in a single year, suggesting that China's crypto ban is failing and that a broader reopening could be a significant market catalyst. The episode closes with an extended Q&A segment in which the host offers guidance on Bitcoin custody and security for new holders, discusses MicroStrategy's relative volatility versus Bitcoin, and explores the potential for crypto-backed lending without margin calls.
Key Takeaways
FULL TRANSCRIPT
Fair Shake PAC puts $100 million behind 32 House candidates ahead of 2026 midterms
For all the politicians that shot down the Clarity Act and agreed with the big banks to go against crypto, you just got put on notice.
As a reminder, we are coming into the midterm election time frame. That will be the first week in November, which is roughly about a month or so away. But as a reminder before we get to the main story today — since 1942, buying the S&P 500 on midterm election day, the day of the actual elections when people go to vote in the first week of November, if you had bought the S&P 500 and held for six to seven months, you are up 15.2% on average. And that is every single midterm year, which happens every four years in the United States. So if we're looking for the big push up, that could be the next catalyst.
But what we're talking about today is Fair Shake. Fair Shake had a pretty interesting piece today about how much money is being deployed. Crypto PAC announces support for 32 House candidates in the US midterms. And basically what they're doing is this: they're saying, "Look, we're going to reward loyalty." Not that they're going to give a million dollars to each and every one of these politicians we're going to talk about, but they are putting a million dollars into the campaign to run advertisements — whether that be on radio, social media, television, or whatever else. They're not giving the money directly to the politicians. They're saying, "We're going to support you." And that is a pretty big way to move the tide in the direction of what the crypto industry wants.
Now, you may think that because the Clarity Act — which amazingly got out of the banking committee, thanks to Ruben Gallego and Angela Alsobrooks, who are Democrats who did not side with Elizabeth Warren — because that actually happened, we were entertaining the idea of a Clarity Act passing. On this channel, we've talked many times about the Clarity Act. I just did not think that the Democrats would give the sitting president and all of the people underneath him in the House and the Senate a victory lap to rub it in their faces during the midterm year — to go, "Hey, we're the party of crypto. We got you the Clarity Act. Vote for us." I just didn't see that happening. And unfortunately, it actually came out to be the reality.
So you would think that all of this would go towards Republicans. That's what I thought. But you'd be wrong. I'm wrong. On Monday, Fair Shake said that it would support 19 Republican and 13 Democratic incumbents in the US House race for 2026. The PAC is expected to spend more than $100 million on ads supporting House and Senate candidates in 2026.
Now, here's the beauty of advertising and marketing. You can make anything look fantastic with the right marketing campaign. It's great for McDonald's — arguably the worst food of all time — yet you see it everywhere and people are like, "That doesn't seem so bad." It's the same thing with candidates. The more money you can put into it, it's amazing how people start to go, "Hmm, maybe that person's not so bad at the end of the day."
The PAC is expected to spend $100 million total, including at least $30 million in one race — Ohio's Senate race — to back Republican Jon Husted over Democrat Sherrod Brown. That would be an interesting one to follow, because Ohio is pretty much the doorway to the presidency. You need Ohio — not every time, but for the majority of the time. As Ohio goes, so goes the presidential seat.
Now, this is not a political channel. I just like to bring to the point how we need Fair Shake and these types of PACs to speak for us, because it seems like if we don't put somebody into the House and the Senate, the big banks — which just destroyed us with the Clarity Act — are going to run the show. And that's not what I think we all want.
According to the Crypto PAC, three Republican and three Democratic candidates will each receive $1 million in spending ahead of the 2026 midterms. All 32 candidates, Fair Shake said, would receive its support to advance the Digital Asset Market Clarity Act. And Fair Shake had — this is the crazy part — $122 million cash on hand ahead of the midterms. So they're like, "Well, we've got $100 million, but we're going to keep this $22 million in reserve."
As part of its plan to help build the largest pro-crypto caucus in American history, the consumer advocacy group Public Citizen reported that the PAC had already spent $82 million in ads opposing or backing candidates as of June. So they're already hot to the presses. That's less than half of the $189 million it estimated came from advocacy groups and companies aligned with the crypto industry.
As the graphic points out, you've got 32 House candidates. That money is going to 19 Republicans and 13 Democrats. So if you're a Democrat, don't feel like you got left out. And if you're a Republican, don't feel like it's all going to the Democrats. There are people that did vote for the Clarity Act, and this is why you get rewarded with loyalty.
Now, depending on what you think of the Clarity Act, that's up to you. But it seems like a lot of the banks had their fingers on it — that's just my read. $100 million expected total, $30 million in that one Ohio race. Major backer: Coinbase.
And here are the six candidates getting a million dollars each — funny enough, it's three and three. Janelle Bynum, Democrat for Oregon. Derek Tran, Democrat of California. A Democrat in California — wow. Steven Horsford, Democrat of Nevada. French Hill — great name — Republican of Arkansas. Bill Huizenga, Michigan Republican. And Brian Steil, Republican of Wisconsin. So again, you can have this across the aisle. These things can actually work, and I tip my hat to that. Hopefully we get the right people in at the right time and we can actually have a really great bull cycle.
CFTC steps in with new regulatory framework after Congress fails to pass the Clarity Act
But it doesn't stop there as far as regulation goes. I know that people say Bitcoin doesn't need regulation and crypto doesn't need regulation — maybe not Bitcoin per se, but some of this stuff really does. And I'm glad to see that the CFTC, the SEC, and the OCC can step in because Congress can't get it done.
CFTC Chair Michael Celig provided further details on the previously announced Regulation CTX and Regulation CAM framework. What this does is impose requirements related to customer asset segregation — which, if you remember back in the days of FTX, they didn't segregate anything. Everything was put together, and unfortunately Sam Bankman-Fried spent a lot of the funds that he maybe shouldn't have. If he had kept things segregated, he actually would have been one of the greatest investors of all time, but of course it didn't work out back in 2022. It's why it's a good idea to hold on to some of those assets.
We also have anti-money laundering and proof of reserves requirements, which is a pretty good idea — especially if we have all these different exchanges making a bunch of different claims. I think it's important that we can say, "Can you back that up?" Hopefully there's no run on the bank and you actually put those things out.
But that wasn't the biggest thing to me. The big thing was that in this piece the CFTC passed, they named what they considered to be digital commodities. And to me it's no surprise: Bitcoin, Ethereum — I think we can all agree those are commodities, right? Digital commodities, not securities. Bitcoin, Ethereum, Solana. All right, I get that. Stellar. Tezos. What the heck happened to Tezos and XRP? Well, for most of us — I can say yeah, Tezos, I just don't know. I guess I can see it. I just haven't heard much about what's going on with Tezos lately. Maybe some Tezos holders can enlighten me. But that's what we have.
And then, just to bring this home, Michael Celig was actually on Squawk Box. He said some pretty interesting things. Take a listen.
Michael Celig on Squawk Box: CFTC's new crypto framework explained
CNBC Host: Proposed crypto rules to establish oversight after Congress failed to pass a law. Joining us right now with some of the details is CFTC Chairman Mike Celig. Good morning to you. I know you've been frustrated, I think, with Congress in terms of not passing that bill. In place of that, what exactly does this new framework do?
Michael Celig: I am absolutely disappointed in Congress for not getting this bill to the president's desk. It's been a priority since day one. We've worked really hard to get here, but we've got statutory authority and we're going to use it. The SEC is doing the same. They issued their proposed crypto assets framework, which is kind of the framework for distributing crypto assets. Gary Gensler was very critical of these offerings — which he and others referred to as initial coin offerings — that created a path to get the tokens into the United States with the protections of the securities laws. But the tokens themselves are not securities in most instances. So they need a place to trade.
We saw four years ago with the collapse of FTX that many of these exchanges, even if they're licensed at the state level, don't have market-based regulations. So we're putting in place market-based regulation — anti-manipulation, anti-fraud, segregation of customer assets, segregation of functions between brokers, exchanges, and clearing. And we expect customers to want to trade on these platforms that are federally regulated. It's an option. We don't have the ability to say every exchange needs to register with us, as the Clarity Act would have done, but we can create a federal option, and that's exactly what we're doing here today.
CNBC Host: What does it mean to have a federal option? Because you say not everybody has to do it this way.
Michael Celig: It's sort of like the banking model, right? You can get a charter at the state level or the federal level and you're able to engage in certain permissible activities. With federally regulated crypto markets, you're able to offer margin, leverage, or financing. That is a special authority that you're not able to exercise at the state level. States are only able to offer money transmission activity — these are all money transmitter licenses. So it's more of a payment platform. They can't engage in market-based exchange activities.
That's all we really want — just a little bit of clarity. What's the commodity, what's the security, how's this going to work, how can we move things around? And this just answered that question. So yes, unfortunately Congress can't get things done. That's fine. Thankfully, we've got somebody who comes in and goes, "Look, this is what we're going to do. This is how we see it. We're going to use the regulatory authority. We're going to lay these rules down and we're going to move forward."
Now, the thing with that — and we've talked about this before — is that when a new administration comes in, the old administration's rules can get phased out over time. When Congress passes something, it usually lasts a long time unless they actually repeal it, which is very difficult. So expect this to work out for the next two years. After that, it's anybody's guess. But I like the direction things are going.
China's crypto ban is failing: $176 billion P2P economy and a potential super cycle catalyst
As Celig was talking about regulation and clarity — which is great for what he's describing, though Bitcoin probably doesn't need it and will be just fine — there was a video that popped up about China reopening crypto, and it gave me this little blurb that said it could trigger the super cycle. Now, I've been around since 2017. I've heard that term "super cycle." It still hasn't happened. Maybe it happens this time.
What got me to watch this was Joseph Chay, who is the CEO of the Solana company — a listed digital asset treasury dedicated to acquiring Solana, created in partnership with Panta and Summer Capital. And Chay is not some no-name. What he talks about with China got me thinking that there actually could be a reason for a super cycle. Here's about 40 seconds of it.
Interviewer: Is the big prize China? You've talked about this. In fact, you told the journal that China will inevitably find a way to manage and reopen crypto activity. You're the former head of Asia investment banking for UBS. What specific discussions, back-channel negotiations, or regulatory shifts are you seeing out of Beijing that perhaps the market is missing?
Joseph Chay: I can only say this — the Chinese government is watching the technology very, very closely.
It is interesting to see that somebody like Joseph Chay — from the HSBC bank, from the Asian region — is saying that yes, there's a back channel and maybe he's talked to certain people. And as you know, Hong Kong is actually going forward with a couple of different initiatives for crypto and digital assets. So if this could actually happen, maybe this bull run is a legitimate thing and we can just go to Valhalla in the next year, two years, and beyond. We'll see.
But the reason I wanted to show you that is because that's just one guy talking about China and the government watching it. So you're like, "Okay, that's great, but that's kind of useless." Wait — here's some data that backs things up.
China's crypto ban is failing to stop a $176 billion peer-to-peer economy. On this channel, we've talked about the two narratives you're going to hear constantly: tokenization of real-world assets and payments. This is why I think this is a big deal.
Chainalysis estimates China generated at least $176 billion of crypto activity during the 12 months through June 2026, with roughly 60% occurring through peer-to-peer transfers rather than exchanges and other centralized platforms — because they really can't use those too much. That share was 3.5 times higher than in the previous period, marking an unusual divergence from most major crypto markets. The amount of new activity added each month rose from roughly $240 million in March to $5 billion just one year later. So if you put that on a graph and extrapolate the data, how far are we going to be in another six months, another year, two years, three years, ten years? Exponentially, you would see things grow because we're going in the right trajectory.
Stablecoin volumes below $100 jumped almost 1,000%. Transfers between $100 and $1,000 increased 1,570%. And activity between $1,000 and $10,000 climbed 1,321%. At first that last one surprised me, but then it made sense. Why would people want to move that much money? Because — and I'm coming from experience here — it is a hell of a lot easier to move $10,000, $100,000, or $10 million on crypto than it is to go to the bank and say, "I'd like to send my own money to somebody." That type of thing. And of course, anything over certain transaction thresholds gets reported to the IRS. Crypto is just a lot easier. So if this is going to go down with China, that sounds pretty good.
And as a reminder — not to beat a dead horse — go to Visa on-chain analytics. If you scroll down and look at which chains are the big players for the rails, you can see that over the last 12 months, the dominant ones are Tron, Solana, Ethereum, and BNB. You could have Base, Polygon, XRP, and all the other stuff out there — that's true, it could happen. But I think we're going to see a lot of dying off of old, useless altcoins and a move into these larger chains. This is why I don't really mess around too much with anything below the top 50. I think the winners are already being chosen, and they're being chosen by Wall Street, by institutions, by sovereign nations. That's how I see it going.
Tokenization models and valuation scenarios for major chains
And then as a last thing, just as a reminder — I know when people say, "Well, Rob, who cares about payments? Payments are just a small aspect of the global economy. What about tokenization and all these other things?" That's true. But if you go to Dan Teaches Crypto, click on Tools and Price Model, it's not just payments. Then it goes to tokenization of assets, then bond tokenization, then futures and derivatives, then real estate tokenization. If you start to get one chain capturing even 0.5% to 1% of global transaction volume, where does it go?
I'll show you where it goes. This is Solana — you can also do Ethereum or Bitcoin on this little app. If you go from global payments and just do, say, 3% — now look at that, it just doubled. Then real estate tokenization at 1% — now we're at 272. How about stock tokenization? That just became a thing. At 2%, now it's almost a 3x. How about bond tokenization? Looking pretty good. Derivatives, options, and swaps. And now all of a sudden we're looking at a lot of money.
And then there's the valuation multiple — because the way markets move price action is when they say, "Hey, this thing actually does something, it has utility." But the big thing is speculation. Usually it's three parts speculation or FOMO. When they start applying that valuation multiple, things go a little bit crazy. You start to get way wacky stuff and things get overblown. But these things could happen. I'm not saying they are, but that's where we're at.
Q&A
Let me know what you think about that in the comments section.
There was a good post from Do, who said, "Somebody just tried to scam me. They started off so convincingly — careful out there, everybody." Do, if you could let us know in the comment section what that was and how it went down, I'll read it to everybody so everyone can be aware. Thank you for giving us the information.
Rusty reminded me of the good stuff — every year since 1946, the stock market has gone up after the US midterms. Rusty is correct. Good stuff.
James Salty says, "I love when you say 'Slana' as if Trump was saying it." A lot of people don't like it. They get sick of it. I try to tone it down every so often, but to me it entertains me, so I do it all the time.
Newser says, "How will the Russian-invented plague affect Bitcoin?" Well, apparently here comes another plague — another horrible affliction that'll wipe out humanity. I think it's an aerosol version of the bubonic plague, or something like that. One of the researchers, I think in Russia, dropped a container with the virus and unfortunately passed away. And now we're hearing reports that it may have escaped the lab. I'm not sure, but I've heard this story before, so we'll see how it goes.
James says, "What about Canton?" Sounds pretty good. There's supposed to be a big partnership rolling out with the DTCC this month. So hopefully it does well, but it might be a buy-the-rumor, sell-the-news type of event. I have some, so hopefully it does well — but who knows.
Mike says, "Name a Democrat that voted for the Clarity Act." A lot of them voted for it in the House and it was done. But when you get to the Senate, that's when everything got a little wonky. Remember, we had to have a supermajority — 60-40. It just didn't happen. And that's pretty much how it goes. But I don't care what letter is behind your name. I'd have to look at your individual policies. There is a wide difference between, say, a far-right Republican versus a centrist, or a Democrat who is more of a socialist Democrat than a centrist Democrat. It's quite strange. If you go back 20 years, a Democrat 20 years ago would be like a pretty much centrist Republican. It's weird how things change.
Wisdom says, "I don't care who wins the midterms. Neither do I. And I don't care who wants to give up some fake $5,000 — that's not going to happen. I'm out to make money in this manipulated, propped-up AI market." It's probably true. Michael Burry just called for another crash, and he has called the last 60 out of three crashes. So yeah, that guy's on it.
Brian's got a good one: "You'll never have real-world assets until a title of real-world ownership can be legally claimed on a token — which it can't — and legally enforceable in every jurisdiction, which is pie in the sky." And this is the important part. It's the same thing with tokenization of real estate. I remember somebody asked me — I think it was Jimmy — "Would you ever tokenize your properties, like your rentals?" And I'm like, well, if I did that, what's the protection for the person holding a token if I go through bankruptcy, or something happens like a hurricane wipes everything out and I have no insurance, or the insurance doesn't pay? How is the buyer protected? Or is it just, "Hey, you're not protected whatsoever"?
Another thing would be: how do we pay out dividends, and how does that work for the money coming in to be pushed out to everybody? Or is it just for the token itself? And let's say there's a foreclosure — do token holders have any rights to come into the foreclosure hearing and say, "Hey, I bought a bunch of tokens on this real-world asset, this big apartment complex. Give me my money back"? No, that's not how it works. I don't think it's going to work out until that kind of clarity comes through.
Radio Shrink says, "I really think the only thing that 95% of people should buy in the cryptosphere is Bitcoin." I agree with that too. Maybe a little ETH, but basically just Bitcoin. It's the safest thing. And you know what's great about that is that even in this boring bear market, even if you bought the top — even if you told your family right before Halloween or in October, "Hey, you know what you should do? You should buy some Bitcoin," and they bought it right at the top at $126K — if they bought that and then dollar-cost averaged just once a week as it went down, they'd actually be up right now at this point.
So if you're going to tell anybody to buy Bitcoin, there are three things you really should talk to them about. One: if you can stick around four years, you're usually going to be rewarded. Second: when the price goes down, you probably want to keep buying. And the third one is the most important. Now that you have some Bitcoin, just know that you're a target. We need to figure out right now where you're going to store that Bitcoin. Is it going to be in Coinbase, Kraken, OKX, or some other exchange? Are we going to put it on a cold storage device? Are you going to keep it on a hot wallet? What are we going to do here? And also, people are going to call you all the time. You're going to get a bunch of emails and they're going to want to steal it from you. So do you want to handle it yourself, or do you want me to handle it, or do you want a third-party custodial service to handle it — because it's a pain to get it out? Because there's nothing worse — and I get emails about this — than when you tell a family member and then they get socially engineered, hacked, or scammed and lose a big chunk of their life savings. You know who has the answer for that? You do, because you didn't tell them everything.
Geek Dice says, "I bought a Bitcoin ETF for the first time ever last week. Felt weird and unnatural." Not your keys, not your hassles.
Someone asked about when you'd buy MicroStrategy. I don't own Strategy, so I can't really speak to that. I know that last cycle, MicroStrategy outperformed Bitcoin for quite a bit of time. But with everything that has that much volatility — what outperforms on the rise does not equal a smaller fall, because the fall is pretty big and then you have to go through that turmoil. I think if you listen to Saylor, his position is that it's the best option out there. I personally don't think that Bitcoin needs Strategy. I think Strategy needs Bitcoin. But if you want to invest in that option, just know that as things start to turn south and we go more bearish, the price of Strategy will probably drop lower than Bitcoin. If you can deal with that volatility, you might want to think about investing some into it. But that's only for the bull market. As times go downward, you want to start buying Bitcoin as it drops — like we all did.
Someone else says they want a custodian for their crypto that will back it up with insurance — and whoever creates this service is going to be the big winner. Not only that, but the one that could provide real loans where they take in your Bitcoin or Ethereum, give you the actual price for it at that day, and don't do margin calls over the next two, three, or four years — because they realize the price will usually keep going up and they'll take that risk as long as they can custody it and get some kind of yield off of you.
Here's an example. You want to buy a house. A typical house in America is around $410,000. You want $410,000. How much Bitcoin do you have? Let's say you have to put up 2x — so $800,000 worth of Bitcoin. All right, that's going to give them like a 6% to 7% APY. Great. It's going to be on an amortization table, so you're going to be paying a lot in yield. But they're not going to do any margin calls, and at the end of 10, 20, or 30 years, you get that Bitcoin back. Imagine how much Bitcoin is going to be worth in 30 years. Then you get to pay that off. If they can do that — not have margin calls, not say "Hey, we need more Bitcoin from you" like in the Celsius days — if that went away, that'd be huge. And if you get a custodian with insurance on top of that, now we're really doing something.