Bitcoin briefly fell to its lowest level in six weeks on Wednesday after Democrats won control of both the US Senate and House of Representatives in the midterm elections.
The result could complicate the crypto industry’s push for faster deregulation, Reuters reported .
The market recovered some of its losses shortly afterwards. Bitcoin was trading roughly flat at $78,070 by 07:15 GMT, while ether gained around 1% to $2,292, according to Reuters.
The political result comes at a difficult time for the crypto market, which was already under pressure following last week’s $6.3bn Binance hack , the largest cryptocurrency theft on record.
By Tuesday, customers had withdrawn a net $4.72bn from the exchange since it reopened following the attack.
The crypto industry has spent more than $300m supporting candidates from both parties across the current and previous election cycles, Reuters reported.
The investment was intended to help secure legislation that would give US crypto companies greater legal certainty and establish clearer rules for operating in the country. A Democratic majority in both chambers could make that agenda harder to advance.
The latest decline adds to a prolonged downturn. Bitcoin has lost around 41% of its value since reaching a record above $122,000 in October 2025.
The total cryptocurrency market is now worth approximately $2.61tn, based on CoinMarketCap data cited by Reuters.
Around $300bn has disappeared from the market’s value in the past month alone. Concerns about whether heavy investment in AI will generate sufficient returns, combined with higher borrowing costs, have encouraged investors to move towards safer assets, including government bonds.
“The market may be re-evaluating the risk-reward profile of crypto assets,” Tim Sun, senior researcher at HashKey, told Reuters.
Sun said the recent series of hacks was also prompting investors to reconsider the risks of holding assets on cryptocurrency exchanges. At the same time, the shift in political power in Washington could delay new legislation for the sector.
The regulatory environment has changed considerably since Donald Trump returned to the White House.
His administration has pursued lighter enforcement, established a strategic bitcoin reserve, eased crypto companies’ access to banking services, and supported the passage of a federal stablecoin law.
Trump and members of his family also have business interests in the sector, including a meme coin and the World Liberty Financial platform. Political spending has extended beyond the crypto industry, too.
Elon Musk’s contributions to candidates and political groups during the midterm cycle reached a record $474m, according to The New York Times .
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