Bitcoin Retreats Toward $76,000 as Odds of Democrats Winning Both Chambers Rise

Bitcoin fell as the odds of Democrats taking control of both chambers of Congress in the U.S. midterm elections increased.

As of 11:40 a.m. Korea time on November 4, Bitcoin was trading at $76,709.50 on Binance's USDT market, down 0.28% from a day earlier. It briefly climbed back above $78,000 earlier in the day, but later surrendered most of those gains after falling as much as 1.6% intraday.

Markets are worried that if Democrats also capture the Senate after the House, the Trump administration's crypto-friendly policy agenda could face obstacles. Investors are also watching for delays to industry-backed regulatory legislation and the possibility of tighter oversight of crypto companies.

Rachel Lucas, an analyst at BTC Markets, said investor sentiment remained cautious, though there were no signs of broad-based panic selling. In the options market, investors are hedging risk in existing positions, and election-related volatility is expected to be short-lived.

Headwinds within the crypto market are also adding pressure. They include last week's $6.3 billion Binance hack and weaker retail demand as investor attention shifts to the artificial intelligence industry. Bitcoin is down about 6% from its peak last Thursday, before the hacking incident.

Damien Lo, chief investment officer at Ericsenz Capital, said the crypto market is showing a moderate level of fear in the short term, while longer-term uncertainty persists. He added that a selloff in technology stocks and the possibility of renewed war in the Middle East are weighing on risk assets more broadly.

The outlook for the CLARITY Act, a U.S. crypto market structure bill, is also in focus. Lucas said the measure was already deadlocked in the Senate, and that if control of key committees changes, renegotiation is more likely than a swift resumption of the legislative process. She added that markets have already priced in much of that scenario.

Institutional flows have also weakened. More than $1 billion was pulled from U.S.-listed spot Bitcoin exchange-traded funds over Friday and Monday. Investors have also increased options hedges against further declines ahead of the election result.