Crypto dips on Democrat midterm wins, Binance hacks dent optimism

Cryptocurrencies experienced a brief decline on November 4 as Democrats secured majorities in the Senate and House during the US midterm elections. This outcome could pose challenges for the industry, which has advocated for streamlined regulation of digital assets. The sector had invested over $300 million in supporting crypto-friendly candidates in recent elections, aiming to secure legislation that would provide a solid legal foundation for crypto companies and foster growth.

Bitcoin reached a six-week low before regaining some stability and trading around flat at $78,070. Ether saw a modest increase of just 1%, reaching $2,292. Since hitting record highs above $122,000 in October 2025, Bitcoin has depreciated by around 41%, causing the overall crypto market value to plummet to approximately $2.61 billion, according to CoinMarketCap.

The market has witnessed a loss of $300 billion in value during October alone, primarily due to growing apprehension over future returns from artificial intelligence and the impact of rising borrowing costs, which have driven investors towards safer assets such as government bonds and stable currencies. The recent $6 billion hack of the Binance platform, the largest ever, has further dampened optimism.

Following the hack, Binance customers withdrew a net $4.72 billion from the world's largest cryptocurrency exchange since reopening on November 3. Tim Sun, Senior Researcher at HashKey, noted that the market may be reassessing the risk-reward profile of crypto assets, recognizing that security incidents are prompting investors to scrutinize the industry's security infrastructure and custody risks.

However, there are also concerns that shifts in the US political landscape could hinder the progress of structural crypto legislation and the development of institutional frameworks. Despite these hurdles, the crypto sector has seen significant reforms during the Trump administration, including more lenient enforcement, the creation of a strategic Bitcoin reserve, and easier access to banking, exchange-traded products, and a federal stablecoin law, which could facilitate the integration of these assets into mainstream payment systems and money transfer services.