Bitcoin climbs back above $80,000 after the US election shock

Bitcoin slid to $76,700 after the US midterm elections before rebounding to $80,500 on November 4, according to successive reports from CryptoPotato and The Block. Projections gave Democrats control of both chambers of Congress, bringing back uncertainty over crypto legislation. On November 5, Cointelegraph also reported combined inflows of $128 million into Bitcoin and Ether ETFs.

How did Bitcoin and Ethereum react to the election?

Bitcoin’s initial drop did not turn into a sustained slide. CryptoPotato recorded a price of $76,700 in the wake of the vote, linking the negative sentiment to concerns about Democrats’ stance toward the industry.

Later on November 4, The Block reported a 3.5% rise in Bitcoin to $80,500 and a 6% gain in Ether, the native coin of the Ethereum network. In the same coverage, Bitwise estimated that the Binance breach had a limited impact on the market.

Our takeaway is the quick change in direction, not any conclusion that political risk has disappeared. The market’s mood flipped within a single day. That alone shows how easily a reading based only on the first headline can mislead.

What changes in Congress for crypto regulation?

Democratic control of Congress raises questions about the path of legislation, but it doesn’t automatically mean every regulatory development will be frozen. According to NBC News projections cited by CryptoPotato, Democrats secure 51 seats in the Senate and 244 in the House of Representatives, versus 191 for Republicans in the House.

In September, Democrats voted unanimously to block the Clarity Act. The bill sought clearer operating rules for crypto businesses and a clear line between digital assets that are securities and those that are commodities.

Still, the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) can still act through rules, approvals and guidance. Neither agency can pass laws, however, and laws are far more resilient to changes of administration.

Meanwhile, Democrat Robert Garcia is expected to chair the House Oversight Committee. His stated goals include investigating the Trump family’s crypto business ventures, such as the TRUMP coin.

What do the ETF inflows show?

Combined ETF inflows don’t mean every individual product attracted money. ETFs are exchange-traded funds, and according to Cointelegraph, the Bitcoin and Ether funds drew a combined $128 million.

Fidelity led inflows into Bitcoin ETFs. BlackRock’s IBIT, by contrast, saw outflows of $201 million, its fourth straight session of outflows. So behind the overall positive figure, money was moving in different directions.

What are we watching from here?

The path of regulation and the split of institutional flows matter more than a hasty reading of the vote. On November 5, Crypto Briefing also reported that Trump Media moved $344 million worth of Bitcoin while its stock sat at a post-election low. The transfer on its own does not prove a sale.

For readers in Greece, this news concerns the US political and investment environment, not any announced change to Greek rules. Our view is that the rebound shows resilience to the initial turmoil, but it isn’t enough to call the regulatory uncertainty over.