Bitcoin rebounds to $78,354 after Democrats win U.S. midterm control

Bitcoin rose 0.7% to $78,354 by 0841 GMT Wednesday, bouncing back from a six-week low. The recovery followed overnight losses triggered by U.S. midterm elections, where Democrats secured control of both chambers of Congress—a result that initially sparked fears over the future of crypto-friendly legislation.

Market Rebound and Election Impact

Ether climbed 1.4% to $2,323 in the same session. U.S. stock index futures also recovered after a dip of as much as 2% overnight. This synchronized movement suggests broader financial sentiment helped offset the initial election shock.

Democratic victories may complicate the industry’s regulatory agenda. While the U.S. government under President Donald Trump pursued a more accommodating approach—reducing enforcement and strengthening the U.S. global position—the outcome does not guarantee a total stall, as some Democrats support clearer, more flexible rules.

The industry has spent over $300 million across the current and previous election cycles to influence policy and encourage regulatory clarity.

ETF Outflows and Security Concerns

Despite the rebound, regulatory uncertainty and security risks persist. Bitcoin remains well below its October 2025 record high of $122,000, down approximately 41% from that peak. Total cryptocurrency market capitalization has dropped to around $2.61 trillion.

A $6.3 billion Binance-related security incident further dampened sentiment, raising questions about custody and infrastructure. After the exchange reopened, customers withdrew a net $4.72 billion, impacting institutional demand.

Bitcoin ETFs saw $215 million in outflows during October. LSEG/Lipper data shows year-to-date net outflows reached $1.84 billion, with weekly outflows hitting $884 million—the largest net weekly withdrawal since early July.

Major altcoins also gained Wednesday. Solana, Dogecoin, and Cardano rose between 1.6% and 2.2%, despite losing nearly a quarter of their value over the previous month. High borrowing costs and AI investment uncertainty have pushed some investors toward government bonds and safe havens.