The political upheaval triggered by the U.S. midterm elections is rippling swiftly through global risk assets, sparking broad-based selling across financial markets.
As expectations grow that Democrats will seize control of both the Senate and the House, Bitcoin lost the key psychological threshold of $77,000 and slid further to around $76,400.
This move is not an isolated event but a direct reflection of intensifying macroeconomic policy uncertainty. Market participants are repricing the sustainability of the Trump administration's tax cuts and deregulatory agenda, fearing that a Democrat-led Congress will impose a stricter regulatory framework on large technology companies and the artificial intelligence sector, prompting capital to flee high-risk assets.
This risk-averse sentiment is evident not only in the cryptocurrency market but has also triggered chain reactions in U.S. stock index futures and major Asian equity markets, signaling that the political risk premium is rising rapidly.
Looking at the specific vote-counting progress, Democrats have outperformed expectations in several key states, directly shaking the Republicans' traditional strongholds. In the battle for Senate control, Democratic Senator Jon Ossoff's re-election in Georgia is now settled, while in North Carolina, Democratic candidate Roy Cooper successfully captured a seat previously held by Republicans. These two victories give Democrats a critical breakthrough in seat numbers and position them to become the Senate majority party.
Even more striking is the fierce contest in Texas, a traditionally Republican stronghold. Democratic candidate James Talarico and Republican candidate Ken Paxton are locked in a tug-of-war, with partial vote counts showing Democrats temporarily ahead. According to Associated Press data, with nearly 70% of statewide ballots counted, Talarico holds 58.9% versus Paxton's 39.5%. Although the statewide count is not yet complete, Texas has been a core Republican base in federal Senate elections since the 1990s, making a potential Democratic breakthrough there both highly symbolic and substantively significant.
Prediction market data further confirms this trend. On Polymarket, the probability of Democrats sweeping both chambers briefly climbed to 99%; on the Kalshi platform, the probability of Democrats taking the Senate stands at about 98%, and the House at about 99%. The surge in these prediction figures reflects the market's high confidence in a transfer of political power, which in turn has amplified asset price volatility.
Data compiled by Woofun AI shows that the financial market reaction displays clear sector divergence, with technology stocks bearing the brunt of the selling. U.S. stock index futures fell across the board, with Nasdaq 100 futures down about 2% intraday, S&P 500 futures down about 1%, and Dow Jones Industrial Average futures down about 0.3%. The decline stems mainly from investor concerns over tighter regulation of AI-related industries.
Asian markets were not spared either. South Korea's KOSPI stood at 5,445.93 points, down 3.59% from the previous close of 5,648.79, while Japan's Nikkei 225 also dropped 3.5%. Notably, the KOSPI had opened the day in positive territory, but market sentiment reversed swiftly as U.S. midterm vote counting progressed. Because South Korean and Japanese stock markets have a high concentration of technology shares such as semiconductors, they are extremely sensitive to shifts in investor sentiment toward U.S. AI-related stocks.
Chris Weston, head of Pepperstone, analyzed that depending on the extent of the Democratic victory and whether Republicans can retain Senate seats, investors may make very large position adjustments. This cross-market linkage effect shows that global capital is rapidly adjusting its risk exposure based on the redistribution of U.S. political power.
In the digital asset space, changes in the political landscape have particularly far-reaching implications for policy prospects. If Democrats control both chambers, key legislative plans including the CLARITY Act could be affected or even shelved. Especially given last month's major hack of Binance, future regulatory requirements on exchange security and investor protection are expected to tighten further, potentially squeezing the crypto industry's room for innovation and raising compliance costs.
From a technical perspective, whether Bitcoin can hold the $76,000 mark is crucial. Digital asset trading firm Wintermute previously noted that $76,800 — its measure of the 50-week moving average — is an important support level. Once this level is decisively breached, the coin price could face greater downward pressure. As of 12:40 p.m. Korea time on the 4th, Bitcoin was trading at $76,400.79 on CoinMarketCap. Although the 24-hour decline was about 0.6%, selling pressure continued to build as vote counting proceeded in full swing.
This price level not only tests the validity of technical support but also tests the market's tolerance for long-term policy uncertainty. If Democrats ultimately establish a congressional majority, the crypto industry may face a stricter regulatory environment, further affecting its valuation logic. Conversely, if Republicans can hold key seats, market sentiment may recover after short-term volatility. Currently, $76,000 has become the core battleground between bulls and bears, and its outcome will determine the direction of the next market move.
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