Bitcoin Rebounds After Democratic Midterm Sweep, But Crypto Faces Tougher Fight in Washington

In brief

• Bitcoin recovered from a six-week low to trade at $78,354 early Wednesday, while Ethereum rose to $2,323 following Democratic wins in both chambers of Congress.
• The crypto industry's Clarity Act had already failed a key Senate vote in September, leaving its push for a federal market rulebook facing a tougher path.
• Crypto groups spent more than $300 million backing candidates across two election cycles, even as hacks and investment outflows weighed on the market.

Bitcoin and Ethereum recovered Wednesday after Democrats won control of both houses of Congress in the U.S. midterm elections, despite the results likely making the crypto industry's push for friendlier federal rules more difficult.

The crypto market recovery, in technical terms, appears to be more a natural bounce, and in line with expectations, instead of a trend reversal or a FOMO-driven spike. The overnight selloff also reversed as U.S. stock futures bounced back, making it hard to pin the recovery on politics alone.

Bitcoin briefly hit a six-week low before a bounce that took it back to just above $80,000 once again, above its average price of the last 50 days, which is a solid bullish sign after weeks of bearish correction.