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Cryptocurrency prices recovered alongside US stocks on November 4 after Democrats won both chambers of Congress in the midterm elections, reversing overnight losses as investors assessed the political outlook.
Bitcoin and other major cryptocurrencies initially declined as election results emerged. However, prices recovered as US stock futures reversed losses, with the rally extending into November 5.
Bitcoin briefly fell toward USD 75,600 during the election count before recovering above USD 78,000 on Wednesday morning. By November 5, Bitcoin had reclaimed USD 80,000, while Ethereum traded near USD 2,425. XRP also advanced toward USD 1.31, and Solana recovered toward USD 96.
The Bitcoin price recovery after the midterms followed gains across US equities. The Dow Jones Industrial Average surged 3.03% on November 4, while the S&P 500 gained 1.58% and the Nasdaq Composite rose 1.44%.
Meanwhile, global stocks also advanced. Europe's STOXX 600 gained 1.82%, while the MSCI All-World Index rose 1.38%. Brent crude prices fell nearly 9%, and U.S. Treasury yields declined as investors assessed changes in Washington's political direction.
Despite Wednesday's recovery, the cryptocurrency market has lost approximately USD 300 billion in value over the past month. Bitcoin also remains well below its October 2025 record above USD 122,000.
Democrats secured majorities in both congressional chambers during the November 3 elections, ending Republican control of Congress when the new session begins in January 2027. The outcome raises questions about President Donald Trump's cryptocurrency policy agenda.
The crypto industry spent more than USD 300 million supporting candidates from both parties across the 2024 and 2026 election cycles. However, the CLARITY Act faces renewed uncertainty after failing to advance through the Senate in September.
President Trump's administration has supported lighter cryptocurrency enforcement, expanded banking access and established a strategic Bitcoin reserve. Meanwhile, some Democrats have also backed cryptocurrency-friendly measures, although disagreements remain over investor protections and regulatory oversight.
"The market may be re-evaluating the risk-reward profile of crypto assets," said Tim Sun, senior researcher at HashKey.
Security concerns also remain following the October 29 Binance hack, which affected an estimated USD 6.3 billion in assets. Binance customers withdrew a net USD 4.72 billion after the exchange began reopening withdrawals.
Additionally, reports on November 5 indicated that Federal Reserve and OCC supervisors had contacted banks to check for unusual activity following the attack. Binance said it was keeping regulators informed, while the agencies declined to comment.
Institutional fund activity also improved as cryptocurrency prices recovered. Farside Investors recorded USD 74.6 million in net Bitcoin ETF inflows on November 4, ending three consecutive sessions of withdrawals totaling approximately USD 1.16 billion.
Fidelity's FBTC led with USD 236.7 million in inflows, while ARK 21Shares' ARKB received USD 19.9 million. However, BlackRock's IBIT recorded USD 201.2 million in withdrawals, extending its four-session outflow streak to USD 935.2 million.
Ethereum ETFs also attracted USD 53 million, ending seven consecutive sessions of withdrawals. BlackRock's ETHA received USD 32.8 million, while Fidelity's FETH gained USD 19.2 million. Combined, Bitcoin and Ethereum ETFs recorded USD 127.6 million in net inflows on Wednesday.
The latest inflows reversed the previous selling streaks, although the figures cover only one trading session. Further daily fund reports will show whether demand continues after the midterm election recovery.
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