Bitcoin slid to about $75,740 overnight before recovering to $77,000 as U.S. midterm returns showed Democrats taking the House and closing in on the Senate, dragging stock futures and crypto lower together.
Key Takeaways
- BTC fell from about $77,970 to $75,740 between 21:45 and 03:10 UTC as midterm results rolled in.
- Nasdaq 100 futures dropped about 2% as NBC News projected Democrats will win control of the House.
- Kalshi traders put Democratic Senate control at 99%, with the next market test at Wednesday’s U.S. open.
The Midterm Effect
Bitcoin’s price took a hit on election night, dipping to roughly $75,740 as the results came in. It is currently trading near $77,300 at the time of writing.
As expected, the broader market followed as well, with crypto’s total market cap falling about 2.9% over 24 hours to roughly $2.58 trillion (all while ether hovered around $2,240 and XRP closed near $1.26).
What the Results Show
The sell-off tracked the scale of the Democratic gains. NBC News projected that Democrats had won control of the House of Representatives, and CNBC’s election desk estimated the party would take at least 235 seats, well above the 218 needed for a majority.
The Senate had not been formally called, but traders were not waiting. Prediction market Kalshi put the odds of Democrats controlling the chamber at 99% overnight. Democrats flipped North Carolina, where Roy Cooper beat Michael Whatley, and Polymarket projected that James Talarico had flipped Texas’s Senate seat, which would make him the first Democrat to win a Senate race in the state since 1988.
Prediction markets had leaned this way for days, and Bitcoin.com News reported before the vote that both Kalshi and Polymarket traders were favoring a Democratic sweep.
Stocks Bleed With Crypto
Bitcoin was not alone in witnessing a slump as CNBC reported that S&P 500 futures traded 1.1% lower, Nasdaq 100 futures shed 2% and Dow futures fell 367 points, or 0.7%. The Kobeissi Letter noted the S&P 500 was on track to open below 7,500 for the first time since July 31 as markets priced in a Democratic victory in both chambers.
For crypto, the worry is policy, given that a Democratic Congress would hand committee gavels to lawmakers who have been far more skeptical of the industry. Scott Melker asked followers to “imagine waking up to Maxine Waters” chairing the House Financial Services Committee and Elizabeth Warren leading Senate Banking, both of which shape crypto legislation such as the CLARITY Act market structure bill.
Lastly, it bears mentioning that leverage added even more pressure to the mix, with $450M in liquidations waiting for leveraged long positions if the price fell to $76,200, a level BTC has since broken. Meanwhile, the Crypto Fear and Greed Index is sitting at 34, a signal of “Fear.”
The Bull Case Has Not Disappeared
Despite the prevailing bear sentiment, Fundstrat’s Tom Lee argued that even if Democrats take both chambers, they still can’t pass anti-AI or anti-crypto laws because the president holds a veto.
History also offers bulls some comfort and Cryptoquant noted that bitcoin was higher 12 months after every midterm since 2010, four out of four, with a median gain of 63%, while warning that the pattern overlaps with the halving cycle. Bitcoin.com News has also tracked how bitcoin’s price fell after the last three midterms before recovering.
What to Watch
The election landed on a market that was already under strain. Spot bitcoin exchange-traded funds (ETFs) lost more than $1.04 billion over two sessions, and the Binance hack has kept prices under pressure.
