Bitcoin traded near $78,300 on Wednesday morning, up about 1% on the day, after Democrats won control of both chambers of Congress in the midterm elections. The result followed a sharp overnight dip, with the cryptocurrency briefly falling to $75,618, its lowest level in seven weeks, before recovering by the European open.

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

Although prediction markets had indicated for weeks that Democrats were likely to win the House, the Senate margin and losses by several Republican candidates backed by the crypto industry surprised observers. Traders appeared to treat the result as a risk that had already been priced in. Options desks also recorded heavy call buying on election day, with block volume more than double the previous session.

The crypto industry’s political spending did not prevent several setbacks. Super PACs spent more than $170 million during the election cycle, much of it supporting Republicans. In Ohio, Sherrod Brown defeated Sen. Jon Husted in a special election despite roughly $64 million in crypto spending aimed at opposing Brown, who previously chaired the Senate Banking Committee and resisted market-structure legislation.

Three House Republicans regarded as industry allies also lost their seats: Bryan Steil of Wisconsin, Zach Nunn of Iowa and Ann Wagner of Missouri. Mike Lawler of New York conceded to Democrat Cait Conley, although the race had not been called. French Hill appeared to retain his Arkansas seat, but Democrats are set to take control of the House Financial Services Committee, with Rep. Maxine Waters expected to lead it.

There were also victories for candidates described as supportive of bitcoin. In Texas, Democrat James Talarico defeated Ken Paxton with about 55% of the vote. Talarico had voted for the 2025 bill creating the Texas Strategic Bitcoin Reserve. In Kentucky, industry ally Andy Barr won the open Senate seat, while Sen. Pete Ricketts held his Nebraska seat.

The change in congressional control could complicate the path for the CLARITY Act, a market-structure bill that passed the House in July 2025 but failed a Senate cloture vote in September. The bill would expire if Congress does not pass it before the new session begins on Jan. 3. Sen. Angela Alsobrooks has said a vote during the lame-duck period remains possible, leaving the coming weeks as an opportunity to advance the current text.

Democrats are also set to gain control of key committees and a greater role in staffing the SEC and CFTC. The incoming House Oversight chairman, Robert Garcia, has said Democrats will examine the Trump family’s crypto ventures, the pardon of Binance founder Changpeng Zhao and federal agencies’ handling of the sector.

Bitcoin’s price recovery came as demand remained a concern. U.S. spot bitcoin ETFs recorded about $1.16 billion in outflows over three sessions, and bitcoin was still roughly 27% below its price a year earlier. Traders’ next technical test was identified near $82,000. The GENIUS Act, signed in 2025, is scheduled to take effect on Jan. 18 regardless of the election result.

Sources: Bitcoin Magazine.