Bitcoin dropped to USD 73,708 overnight into Monday after the United States midterm elections, its weakest level since August. Ether fell roughly 5 percent and briefly slipped under USD 2,100, as investors brace for tighter oversight of the crypto industry under a Democrat-controlled Congress.

The midterms are held halfway through a US president's term, with voters choosing the entire House of Representatives and part of the Senate. Both chambers write the laws governing the crypto market, and their committees also set the political agenda. Democrats secured both chambers in early November; the Senate had already allowed the CLARITY Act, the market structure bill, to fail in September 2026. Bitcoin still traded above USD 80,000 at the end of October. Then, on the day of the Binance hack, a slide liquidated more than USD 356 million in leveraged long positions. After the latest low the price briefly recovered above USD 75,000, but the rebound stalled.

Democrats Capture Both Chambers

The Associated Press called both chambers for the Democrats in early November. In the Senate, the party gained seven seats and currently holds 54 to 44 seats, with races in Alaska and Mississippi still undecided. Among its pickups was Texas, which last voted Democratic in 1988, along with Ohio and Iowa. Republicans, by contrast, failed to flip a single seat. According to CNN, Democrats are heading for more than 250 House seats, which would be the largest majority in almost 20 years, though counting there continues.

The election went badly for the crypto industry. In Ohio, Sherrod Brown, former chair of the Senate Banking Committee, defeated Republican Jon Husted despite heavy industry spending against him. Crypto-friendly Republicans Bryan Steil, Zach Nunn and Ann Wagner lost their House seats, while prominent crypto critics won their races, according to Reuters. The industry's bet on a friendly Congress therefore did not pay off.

Committee assignments now become decisive, because these are the panels where crypto legislation such as the CLARITY Act is drafted and advanced before it reaches the floor. Observers see Elizabeth Warren as the favorite to chair the Senate Banking Committee, while Maxine Waters is likely to take over the House Financial Services Committee, although Sean Casten is challenging her. Neither post is settled; the decisions are formally made when the new Congress organizes in January 2027. As chair, Warren would gain subpoena power and control over the committee's agenda. Often overlooked, however, is the Senate filibuster rule, which still requires 60 votes for legislation. The new majority initially gives Democrats hearings and subpoenas, but no free hand on legislation.

CLARITY Act Expires in January

The CLARITY Act is the central US market structure bill for crypto assets. It aims to define which tokens fall under the securities regulator, the SEC, and which under the futures regulator, the CFTC. The distinction matters because securities status brings registration and disclosure obligations. The House passed the bill in July 2025 by 294 votes to 134. The Senate Banking Committee advanced it in May 2026 by 15 votes to 9.

On the Senate floor, however, the bill failed in September 2026. The cloture motion, which would have opened debate, received only 49 votes in favor to 50 against — eleven short of the required 60 — and no final vote took place. The disputes centered on ethics rules for crypto dealings by officials and the Trump family, while the banking lobby resisted yields on stablecoins and another conflict concerned banking activities. Notably, the bill failed under a Republican Senate majority, not because of resistance from the incoming Democratic majority.

The bill expires with the outgoing Congress on January 3, 2027, meaning the new Congress would have to start the process from scratch. The SEC, however, is not waiting for lawmakers. In August 2026 it proposed its "Regulation Crypto Assets" rulebook, followed in September by an order on tokenization. SEC Chair Paul Atkins promised to act with or without legislation. For now, market structure regulation is shifting to the agencies — the legislative path had already stalled before the election.

Binance Hack, Nvidia and Iran Add Pressure

At the end of October, attackers drained around USD 6.3 billion from wallets at the crypto exchange Binance, the largest crypto theft to date, surpassing the USD 1.5 billion Bybit hack in 2025. The stolen funds spread across ten blockchains, with most leaving within about 20 minutes. TRM Labs and Chainalysis attribute the attack to the North Korean group TraderTraitor, although Pyongyang has denied involvement. Binance estimates frozen funds at around USD 3 billion, and Tether and Circle froze around USD 2.6 billion in their stablecoins — issuers can lock tokens at specific addresses, which restricts what a thief can do with them. The exchange plans to cover the loss from its SAFU emergency fund, for which it has set aside USD 6 billion. The initial investigation names an engineer's laptop as the point of entry, and in the wake of the hack, the Fed and the OCC are now asking banks about vulnerabilities.

Two triggers from outside the crypto industry added pressure on Sunday. Nvidia's board opened an independent investigation into CEO Jensen Huang, run by a committee of independent directors together with outside lawyers. Huang remains in office and admitted to an affair in an email to employees. According to reports, US intelligence agencies classified the woman involved as a Chinese spy, although Reuters could not independently verify this. The board sees no reason to believe the matter affects national security or company secrets. Meanwhile, talks with Iran collapsed, with US Secretary of State Marco Rubio calling Iran's demands "outrageous." Since the Iran war began in March, Bitcoin has mostly fallen during oil rallies.

The available evidence does not clearly show which factor drove the weekend decline. Reuters mainly attributes it to regulatory concerns and cites the Binance hack as an additional burden. CoinDesk, by contrast, sees the Nvidia investigation and the Iran talks as the immediate triggers of the swings. The hack, after all, occurred ten days ago; a direct link to weekend prices is therefore an interpretation, not an established fact.

Bitcoin Holds Just Above the 200-Day Average

Forced liquidations in the futures market accompanied the decline. They occur when exchanges automatically close a leveraged position because the margin behind it no longer covers the exposure. Within 24 hours, exchanges closed leveraged positions worth more than USD 1 billion, of which USD 913 million came from long positions, meaning bets on rising prices. Ether accounted for USD 448 million and Bitcoin for USD 272 million. The largest single liquidation likewise Ether, an order worth USD 48 million.

On Monday morning, Bitcoin traded at around USD 74,100 and Ether at around USD 2,106, leaving Bitcoin between two closely watched technical levels. Moving averages track the average closing price over a set number of trading days and are commonly used to gauge the prevailing trend, with the levels where they sit watched as support or resistance. Traders treat the 200-day moving average at around USD 73,150 as support, while the 100-day average at around USD 77,430 serves as resistance; the overnight low sat just under USD 560 above the lower level. On a weekly basis, Ether lost comparatively more than Bitcoin, at around 7.1 percent versus around 4.6 percent.

The crypto market trades on weekends too, but stock markets only react to the Nvidia investigation and the Iran talks from Monday onward. Whether the rebound holds therefore depends heavily on traditional markets. The key political decisions come later, when the new Congress convenes in January 2027; until then, the undecided Senate races in Alaska and Mississippi, the continuing House count and the SEC's proposed crypto rulebook mark the nearest checkpoints.