Bitcoin briefly sinks to $75,700 as bets on a Democratic sweep rattle markets

Bitcoin briefly sank to about $75,700 early Wednesday as early U.S. midterm returns raised the prospect of a Democratic sweep of Congress, before buyers lifted it back to around $76,700 as of Asian morning hours.

It was a rough few hours. Bitcoin had climbed close to $78,000 late Tuesday as Americans voted, then dropped more than $2,000 as the first results came in. It’s now little changed over 24 hours.

ZEC led the majors, bouncing about 5% to roughly $1,200 after Tuesday’s 10% drop. XRP rose 1% to $1.27, while ether, HYPE and TRX barely moved, with ether at about $2,260. SOL slipped about 1% to just under $92, and BNB was the laggard, down more than 1% to about $689, according to CoinDesk data.

S&P 500 futures fell 1.3%, wiping out an early gain of 0.5%, and Nasdaq 100 futures dropped 2.3%. The dollar fell against most major currencies, and the 10-year Treasury yield slid six basis points to 4.90%. The MSCI Asia Pacific Index slipped nearly 2%.

Investors see a Democratic wave as bad news for stocks and the dollar because it could bring tighter regulatory scrutiny, especially of big tech and AI companies.

Treasuries tend to benefit if gridlock in Washington limits further tax cuts and government spending, which would ease worries about federal borrowing.

Crypto has its own stake in the result. On Monday, Jeff Mei, chief operating officer at crypto exchange BTSE, told CoinDesk that Democrats are against the CLARITY Act, the bill that would set rules for how U.S. crypto markets are regulated.

U.S. stock futures were still pointing to a sharply lower open as votes continued to be counted.