Crypto traders turned sharply bearish as Americans voted in Tuesday’s midterm elections. Polymarket, a prediction market, gave Democrats a 74% chance of winning both the House and the Senate.
Bitcoin holders and crypto stock investors are exposed, because the next Congress decides whether stalled crypto rules ever pass.
Why a Democratic Midterm Sweep Worries Crypto Traders
Many traders see Republican control as friendlier to crypto, according to analytics firm Santiment. Its count of bearish election posts hit the highest level in a month of data.
The sticking point is the CLARITY Act, a bill that would split crypto oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The Senate blocked it 49-50 on September 15, 11 votes short of 60.
Ohio shows what is at stake. Crypto super PAC Fairshake spent $41 million against Democrat Sherrod Brown in 2024, when he chaired the Senate Banking Committee, which oversees crypto.
He lost. This year, Fairshake opened a $30 million campaign against his comeback. Polymarket still prices Brown at 73% to unseat Republican Jon Husted. Ohio polls close at 7:30 p.m. ET.
Is the Election Day Panic Overdone?
As of this writing, Bitcoin traded for $77,768, up by a modest 0.2% in the last 24 hours. Santiment argues crowd fear can mark a turning point.
“Extreme bearishness can also become a useful counter-signal,” the market intelligence and behavioral analytics platform indicated.
The firm said holding $76,500 to $77,000 would improve relief-rally odds for the Bitcoin price. A move back above $79,000 would strengthen that signal. A clean break below $76,000 would confirm the fear.
Its chart cuts both ways. Santiment flagged crowd optimism about the midterms on October 23, and Bitcoin drifted lower in the days that followed.
Congress may also matter less than traders think. Bitcoin rallied after the failed CLARITY vote in September, when Federal Reserve rate hikes looked like the bigger driver.
History shows a rough ride. Three months after the 2018 midterms, Bitcoin sat 46% below its election-day close, yet it finished 45% higher a year later.
Polymarket gives 81% odds that the Associated Press calls the House by the end of Wednesday. Until then, $76,000 is the line Bitcoin traders are watching.
