Cryptocurrencies fell in morning trading on Wednesday after the Democratic Party won majorities in both the Senate and the House of Representatives in the U.S. midterm elections, a result the market sees as a potential brake on the digital asset sector deregulation process pursued by Donald Trump’s administration.
The market is reacting cautiously, even though the industry spent more than $300 million on bipartisan campaign contributions to promote a favorable regulatory framework on Capitol Hill.
Pressure on market value
The pullback in crypto assets coincides with a broader market correction: the sector has lost around $300 billion in market capitalization over the past month.
Political and macroeconomic pressures have been compounded by the reputational damage left by the recent cyberattack on Binance, from which clients have withdrawn a net $4.72 billion since trading resumed over the weekend.
Industry analysts warn that the combination of stricter requirements for holding funds in custody and the loss of Republican control of key committees in the US Congress creates an adverse environment for legislative progress on digital assets.
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