Bitcoin slips as Democratic sweep bets threaten crypto agenda

BITCOIN edged lower as bets on a possible Democratic sweep of Congress gained traction, adding political uncertainty to a market already struggling with fragile investor appetite.

The original cryptocurrency slipped as much as 1.6 per cent in Asia on Wednesday (Nov 4) and was trading around US$76,600 as of 10.30 am in Singapore. The modest move followed declines in US stock futures and the dollar, while Treasuries gained, reflecting expectations that Democratic control of Congress could lead to gridlock in Washington.

“Sentiment is cautious, but this isn’t capitulation,” said Rachael Lucas, an analyst at BTC Markets. “Options show investors hedging the positions they already hold, and they expect any election volatility to be short-lived.”

For crypto investors, the immediate concern is that a Democratic takeover could stall industry-backed legislation and bring tougher scrutiny of digital-asset firms.

The broader macroeconomic implications are less clear: Political stalemate could limit further fiscal stimulus and weigh on speculative assets, though lower Treasury yields could eventually provide support by easing financial conditions.

For now, Bitcoin trading offers limited utility as a gauge of broader market sentiment. Crypto has been grappling with the fallout from a US$6.3 billion hack of Binance last week and diminished retail enthusiasm amid the artificial intelligence boom. Those pressures make it harder to separate the macro-driven market moves from industry-specific issues already weighing on digital assets.

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“Overall sentiment in crypto is near-term moderate fear and long-term uncertainty,” said Damien Loh, chief investment officer at Ericsenz Capital. “Near-term fear because it is still tracking overall risk assets, and with the tech selloff and potentially a restart to the war in the Middle East that is causing some downward pressure.”

Democrats had been widely expected to take control of the House of Representatives, with a chance of also taking the Senate, putting them at odds with President Donald Trump’s Republican White House.

The Trump family’s financial gains from its crypto ventures became a contentious issue this year, helping derail a regulatory bill seen as critical to the industry.

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“With the Clarity Act already stalled in the Senate, a change in committee control would most likely mean renegotiation rather than a quick revival, and markets had largely priced that in,” Lucas said.

Bitcoin is down roughly 6 per cent from the high last Thursday, before the Binance hack.

More than US$1 billion flowed out of US-listed spot Bitcoin exchange-traded funds on Friday and Monday while investors sought greater downside protection in options markets ahead of the US elections. BLOOMBERG