Bitcoin traded near $79,200 on Wednesday morning, up about 2% for the day, after Democrats won control of both the House and Senate in Tuesday’s midterm elections. The result represented the crypto industry’s worst night in Washington since 2022.

The Associated Press called the Senate for Democrats late Tuesday and the House early Wednesday. House Minority Leader Hakeem Jeffries is in line to become speaker. By Wednesday morning, the AP election tracker showed Democrats with 54 Senate seats to Republicans’ 44, with some races still undecided.

The outcome exceeded most forecasts. Prediction markets had placed the probability of a Democratic House above 90% for weeks, but the Senate margin and the defeat of several Republican crypto allies in the House surprised many observers.

Bitcoin initially fell to $75,618, a seven-week low, as results came in during Asian trading. It later recovered the entire decline and moved higher by the European open. Traders generally treated the sweep as the removal of a known risk rather than as a shock. Prediction markets had already priced in a Democratic House, while options desks recorded heavy call buying on election day, with block volume more than double the previous session.

The view among those desks is that a Democratic Congress will be less receptive to crypto legislation. However, divided government, a presidential veto and executive orders could limit how much policy changes. Technical targets near $82,000 are now seen as the next test.

Demand remains a weak point. U.S. spot bitcoin exchange-traded funds lost about $1.16 billion over three sessions, while bitcoin remained about 27% below its level a year earlier. Spot ETFs hold bitcoin directly, and their flows are widely tracked as a gauge of investor demand. The price had been approximately $80,500 a week before the vote. Bitcoin Magazine previously reported on the price near $80,500.

The races that cost bitcoin and crypto

Industry super PACs, which can raise unlimited sums to support or oppose candidates, spent more than $170 million during the election cycle, most of it supporting Republicans, but several major bets failed. Sherrod Brown won back an Ohio Senate seat in a special election against Sen. Jon Husted despite approximately $64 million in crypto-related spending directed at defeating him. That was the largest amount the industry had spent against a single candidate, according to Barron’s election coverage.

Brown chaired the Senate Banking Committee until his defeat in 2024 and spent that tenure opposing market structure bills. Senate seniority rules could limit his chances of reclaiming the committee gavel, but he is returning to a chamber controlled by his party.

Three House Republicans supported by the industry also lost their seats: Bryan Steil of Wisconsin, who was defeated by emergency room nurse Mitchell Berman; Zach Nunn of Iowa; and Ann Wagner of Missouri. Stand With Crypto had endorsed Steil and Nunn and directed advertising money to both campaigns. Mike Lawler of New York conceded to Democrat Cait Conley while the race remained uncalled.

House Financial Services Chairman French Hill appeared to have retained his Arkansas seat, but he is expected to hand the committee gavel to Rep. Maxine Waters.

Pro-bitcoin Talarico wins in Texas

One result was favorable to bitcoin advocates. Democrat James Talarico defeated Ken Paxton in Texas with about 55% of the vote. It was the first Democratic statewide victory in Texas since 1994 and the state’s first Democratic Senate victory since 1988.

As a state representative, Talarico voted for SB 21 during both House passages in 2025. The bill created the Texas Strategic Bitcoin Reserve. The Texas legislative record documents the votes.

In Kentucky, Rep. Andy Barr, an industry ally, won Mitch McConnell’s open Senate seat. Sen. Pete Ricketts of Nebraska also retained his seat.

Strategy Chairman Michael Saylor said Wednesday that “the case for holding Bitcoin crosses party lines.” He cited Florida’s election of Republican Byron Donalds, who, as a congressman, sponsored legislation to codify the U.S. Strategic Bitcoin Reserve, and Texas’s election of Democrat James Talarico, who voted as a state representative for the 2025 bill establishing the state reserve.

JUST IN: Michael Saylor says "Florida elected a Republican governor who backed a U.S. Bitcoin reserve. Texas elected a Democratic senator who voted to create one for his state."

"The case for holding Bitcoin crosses party lines."

pic.twitter.com/5yf0JQ3Q7f — Bitcoin Magazine (@BitcoinMagazine) November 4, 2026

The post is also available from Bitcoin Magazine on X.

What a Democratic Congress means

The CLARITY Act could be the first major casualty. The market structure bill, which would divide oversight of digital asset markets between the SEC and the CFTC, passed the House by 294-134 in July 2025 and failed a Senate cloture vote — the procedural step needed to bring a bill to final passage — by 49-50 on Sept. 15. If Congress does not pass it before the new session begins on Jan. 3, the bill dies. TD Cowen’s Jaret Seiberg wrote Tuesday that a Democratic sweep means there will be no market structure law for two years, according to Bitcoin Magazine’s report.

Sen. Angela Alsobrooks, a CLARITY negotiator, has said that a vote during the lame-duck session — the working period that runs until the new Congress is seated on Jan. 3 — remains possible. That leaves the next eight weeks as the industry’s final window to advance the current version of the bill.

Committee leadership is also set to change. Sen. Elizabeth Warren is in line to chair the Senate Banking Committee, where she has opposed the legislation. Waters is expected to return as chair of the House Financial Services Committee. Incoming House Oversight Chairman Robert Garcia posted two words at 3:18 a.m.: “LAWYER UP.”

Democrats have said they will examine the Trump family’s crypto ventures, the pardon of Binance founder Changpeng Zhao and the agencies’ handling of the industry. That list expanded after last week’s $6.34 billion Binance hack.

Control of the Senate also gives Democrats a role in staffing the SEC and CFTC. Trump must now fill the minority seats to move nominees forward. The agencies have continued shaping crypto policy without congressional action, including the CFTC’s approval of bitcoin perpetuals in May and Tuesday’s equity perpetuals decision. Perpetuals are futures contracts with no expiration date, a format that has become one of the most heavily traded products in crypto markets.

The GENIUS Act, the 2025 law that created a federal framework for stablecoins, will take effect on Jan. 18 regardless of the election result. This article first appeared in Bitcoin Magazine and was written by Micah Zimmerman.