Bitcoin sold off and then rebounded sharply as Democrats won majorities in both the Senate and the House of Representatives. BTC fell below $76,000 as the first results came in, then climbed to $78,300 on Wednesday morning, November 4. Ether also approached $2,300, while TRUMP, the token named after Donald Trump, bucked the trend and fell.
Bitcoin erases election-night losses within hours
Selling picked up as it became clear that Democrats would win both chambers of Congress. Buyers stepped in just below $76,000. By late morning, Bitcoin had climbed to $78,300, more than $2,300 above its overnight low.
Dick Lo, founder of TDX Strategies, attributed the rebound to how quickly the election outcome became clear. In his view, Democratic control of Congress could make it harder to pass legislation backed by the crypto industry. At the same time, with the White House and Congress in the hands of different parties, both sides have less room to push through sweeping policy changes that could unsettle markets.
Nasdaq 100 futures followed a similar path. After falling as much as 2.4% overnight, they edged into positive territory during the European morning session. Both markets saw their steepest losses as the first results came in. Buyers returned once it became clear which party would control Congress.
Bitcoin options trades reach $660 million
The options market offered a glimpse into how traders positioned themselves on election day. Paradigm executive Nicolas Quatravaux said Bitcoin options block trades on the platform reached about $660 million in notional value, more than double the previous day’s volume.
Traders bought roughly $420 million in Bitcoin call options through Paradigm. These contracts give buyers the right to purchase Bitcoin at a set price. Even as selling continued in the spot market, some derivatives traders were positioning for a rebound. The $420 million figure represents the notional value of the contracts.
Ether rises as TRUMP token falls 4%
The recovery spread to altcoins. Ether rose 1.7% to $2,296.59, while XRP gained 1.5% and Cardano added 1.4%. Solana, BNB and Dogecoin each rose 0.8%. TRUMP, one of the tokens most closely tied to the election, fell 4% after the results came in.
For the crypto industry, one of the night’s most closely watched races was in Ohio. Democrat Sherrod Brown defeated Republican Senator Jon Husted to return to the Senate. According to CoinDesk, the crypto-backed groups Fairshake and Digital Freedom Fund committed more than $63 million between them to the Ohio race in an effort to defeat Brown.
The Ohio result could stay on the industry’s agenda long after Bitcoin’s brief sell-off. When the new Congress takes office in January, Brown will be among the senators crypto companies will need to court for support on market structure legislation, just months after backing efforts to defeat him.
