Bitcoin Drops to Lowest Level Since September Ahead of Congressional Vote

Bitcoin fell by 2% to $76,565.9 by 09:25 Moscow time on Tuesday. The largest cryptocurrency dropped to its lowest level since early September, and its decline exceeded 6% in October. The market was pressured by uncertainty regarding U.S. regulatory policy following the midterm elections: traders stayed away from cryptocurrencies.

Markets are still reeling from the theft of crypto assets from Binance amounting to over $6 billion, which occurred late last week. This week, Binance resumed withdrawals gradually and stated that it would compensate all client losses. Additional pressure was exerted by a sharp outflow of funds from exchange-traded funds on Monday: institutional investors reacted to the breach. Appetite for risk also decreased due to a massive drop in tech stocks and growing concerns about excessive spending on artificial intelligence.

Elections and Regulation

Cryptocurrency markets were tense ahead of the U.S. midterm elections: in-person voting was set to begin later on Tuesday. The results are expected to largely determine the regulatory agenda for the remainder of President Donald Trump's term. According to Investing com, the Republican Party is facing record-low approval ratings: the publication cites high energy prices, corruption, and geopolitical tensions around Iran as reasons for dissatisfaction.

If the Democrats gain full control of Congress, where Republicans currently hold the majority in both chambers, it would effectively bury the prospects of passing new laws in support of cryptocurrencies in the next two years. The key Clarity Act bill was not passed this year. A Republican defeat would limit the possibilities of further pro-cryptocurrency regulation predominantly by the executive branch, whose policy can quickly change with a change in administration.

Altcoins

The decline in Bitcoin affected the rest of the market. The second-largest cryptocurrency by market capitalization, Ether, fell by 1.4% to $2,253, XRP traded unchanged. Solana lost 2.7%, Cardano – 1.5%, BNB – 1.7%. Meme coins Dogecoin and TRUMP fell by 2% and 5.5% respectively. Historically strong October for cryptocurrencies has not lived up to expectations for the second year in a row.