Crypto dips on Democrat midterm wins, Binance hack dent optimism

Cryptocurrencies dipped on Wednesday following Democrats' victories in both Senate and House seats during the US midterm elections. This outcome posed a challenge to the industry, which has advocated for deregulation of digital assets. The sector had invested over $300 million in backing pro-crypto politicians in both the current and past election cycles, aiming to pass legislation that would provide legal clarity and boost growth for crypto companies.

Bitcoin hit a six-week low before settling around $78,070, while Ether was trading at $2,292, up just 1%. Since October 2025, when Bitcoin briefly surpassed $122,000, there has been a 41% decline, leaving the overall crypto market value at approximately $2.61 billion, according to CoinMarketCap. The market has lost around $300 billion in value within a month, as worries about future returns from AI and the impact of rising borrowing costs caused investors to move towards safer assets like government bonds and stable currencies.

Additionally, the $6 billion hack of Binance, the largest in history, further dented investor confidence. On Tuesday, Binance users withdrew a net $4.72 billion following the hack at the weekend. The market may be re-evaluating the risk-reward ratio of crypto assets, with security incidents prompting investors to scrutinize the sector's security infrastructure and potential regulatory headwinds due to possible delays in structural crypto legislation and institutional framework development.