The fate of the Clarity Act legislation that seeks to provide a regulatory framework for cryptocurrencies has been thrown into doubt as Democrats take control of Congress.

The left-leaning Democratic Party secured a decisive victory in the midterm congressional elections, taking control of both the U.S. House of Representative and Senate.

The Democrats previously held up passage of the Clarity Act and expressed doubts about its ability to govern digital assets such as Bitcoin (CRYPTO: $BTC).

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"For crypto, the Democratic sweep may well be the final nail in the Clarity Act's coffin," Mati Greenspan, a crypto market analyst, is quoted as saying in a media interview.

That sentiment is being echoed across the crypto sector after the midterm elections, with many analysts saying that entirely new legislation might need to be proposed in Congress.

"The Clarity Act is likely dead in the water in its current form," said Stefan Muehlbauer, head of U.S. government affairs at blockchain security firm CertiK.

Analysts note that the Clarity Act was unable to make its way to U.S. President Donald Trump's desk for signature when his Republican Party previously controlled both chambers of Congress.

Now that Democrats are in control, they are unlikely to show much interest in passing the Clarity Act into law, dealing a blow to the cryptocurrency industry.

Regulatory certainty is seen as key to the future growth and development of digital assets, and the Clarity Act was seen as a potential catalyst for Bitcoin and other crypto.

The crypto industry spent heavily trying to influence the outcome of the midterm elections. Crypto political action groups (PACs) spent an estimated $170.5 million U.S. on the vote.

Bitcoin is trading at $79,400 U.S. on Nov. 5.