Bitcoin prices briefly fell to a six-week low on Wednesday as Democrats won control of Congress, while a major Binance hack added to cryptocurrency market concerns.
However, Bitcoin recovered to $78,070, leaving it roughly unchanged. Ether gained 1% to $2,292. Democratic victories in both the House and Senate could slow legislation sought by digital asset companies.
The cryptocurrency industry spent more than $300 million supporting candidates from both parties across the last two election cycles. It had hoped to secure clearer rules and faster deregulation.
Meanwhile, the broader crypto market lost approximately $300 billion over the past month. CoinMarketCap put its total value at around $2.61 trillion.
Rising borrowing costs and concerns about future returns from artificial intelligence have also weakened investor confidence. Some investors shifted towards government bonds and safer currencies.
Last week’s security breach at Binance added further pressure. Customers withdrew a net $4.72 billion from the exchange by Tuesday after it reopened during the weekend.
Read: Binance Cryptocurrency Heist Outflows Normalise as North Korea Rejects US Claims
Binance said the incident affected approximately $6.34 billion in digital assets. However, the company pledged to absorb the losses rather than pass them to customers.
Tim Sun, senior researcher at HashKey, said investors were reassessing cryptocurrency security and the outlook for new legislation.
Read: US Dollar Index Falls 0.6% to One-Month Low After Vote
“The market may be re-evaluating the risk-reward profile of crypto assets,” Sun said. Since returning to office, President Donald Trump has supported lighter enforcement of cryptocurrency regulations.
His administration has established a strategic Bitcoin reserve. Washington has also passed a federal stablecoin law intended to support wider use of digital assets.
With additional input from Reuters
