(Corrects paragraph 4 to $2.61 trillion from billion)
By Amanda Cooper and Jiaxing Li
LONDON/HONG KONG, Nov 4 (Reuters) – Cryptocurrencies briefly dipped on Wednesday as Democrats won majorities in both the Senate and House in the US midterm elections, a potential blow to an industry that has pushed for faster deregulation for digital assets.
The sector has spent more than $300 million backing crypto-friendly Democrats and Republicans in roughly equal measure during the current and previous election cycles, hoping to pass legislation US crypto companies say will put them on a solid legal footing and allow them to thrive.
Bitcoin briefly touched a six-week low before recovering to trade roughly flat by 0715 GMT at $78,070. Ether traded at $2,292, up just 1%.
Bitcoin has fallen by around 41% since hitting record highs above $122,000 in October 2025, bringing the value of the broader crypto market to around $2.61 trillion, according to CoinMarketCap.
The market has lost some $300 billion in value in the last month alone, as deepening concern about future returns from AI and the strain of rising borrowing costs pushed investors into less risky assets such as government bonds and safe-haven currencies.
Sentiment has also been hurt by the $6 billion hack of the Binance platform last week, the largest heist in history.
On Tuesday, Binance customers had withdrawn a net $4.72 billion from the world’s largest cryptocurrency exchange since it reopened following the hack at the weekend.
“The market may be re-evaluating the risk-reward profile of crypto assets. On one hand, the string of security incidents is forcing investors to re-examine the industry’s security infrastructure and custody risks,” Tim Sun, senior researcher at HashKey, said.
“On the other hand, potential shifts in the US political landscape could stall the progress of structural crypto legislation and institutional framework development. All of these factors leave the crypto market facing strong headwinds,” he said.
Trump, who vowed to make the United States the “crypto capital of the world” during his 2024 presidential campaign, has made his own forays into digital assets, with the launch of his “Trump” meme coin, plus his family’s World Liberty Financial crypto platform, among other ventures.
The sector has seen sweeping reforms in the almost two years since Trump returned to office, including lighter enforcement and the creation of a strategic bitcoin reserve.
Washington has also allowed for easier access to banking and exchange-traded products and passed a federal stablecoin law that could help these assets move into the mainstream payments and money transfer systems.
(Reporting by Amanda Cooper in London and Jiaxing Li in Hong Kong)
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