Democrat midterm sweep knocks bitcoin to six-week low and dents European defense stocks

Democrats' sweep reaches crypto prices

Democrats won control of both the US Senate and House in the midterm elections, and the result reached crypto prices on Wednesday, 4 November 2026. Bitcoin briefly fell to its lowest level in six weeks before recovering some of its losses. By 07:15 GMT it was trading roughly flat at $78,070, while ether had gained around 1% to $2,292. The result landed while the sector was already under strain, and the latest decline adds to a longer downturn. Democrat James Talarico also won the Senate race in Texas, one of the contests behind the wider landslide.

Crypto was already under pressure

A $6.3bn hack on Binance, described as the largest cryptocurrency theft on record, came before the vote. By Tuesday, 3 November, customers had withdrawn a net $4.72bn from the exchange since it reopened after the attack. Bitcoin has lost around 41% of its value since a record above $122,000 in October 2025. The total crypto market stands at approximately $2.61tn on CoinMarketCap data, and around $300bn has vanished from its value in the past month. Investors have shifted toward safer assets, including government bonds, amid doubts about whether heavy AI investment will pay off and worries about higher borrowing costs.

Lobbying and the legislative outlook

The crypto industry has spent more than $300m backing candidates from both parties across the current and previous election cycles. That money was meant to secure legislation giving US crypto companies greater legal certainty and clearer rules for operating in the country. A Democratic majority in both chambers could make that agenda harder to advance. Tim Sun, senior researcher at HashKey, added that the string of hacks is leading investors to rethink keeping assets on exchanges, and that the shift in Washington could delay new sector legislation. He described the market's view in these words:

“The market may be re-evaluating the risk-reward profile of crypto assets.”

The Trump administration has pursued lighter enforcement since Donald Trump returned to the White House, set up a strategic bitcoin reserve, eased crypto firms' access to banking and backed a federal stablecoin law. Trump and members of his family also have business interests in the sector, including a meme coin.

European markets split

Bank stocks led European markets higher as the midterm result cleared some of the uncertainty that had hung over stocks in recent weeks, and lower bond yields added support. The Stoxx 600 Banks Index rose as much as 4.5%. A Goldman Sachs Group Inc. basket of European military stocks fell as much as 4.1% on 4 November, its steepest decline in more than four months, as the outcome dented hopes for a further increase in US military spending. Ukraine's 4.5% notes due in 2034 gained more than a cent on the dollar to above 63 cents, a bet that a Democratic win will improve relations between Kyiv and Washington.

Stoxx 600 Banks Index (rise as much as)4.5%

Goldman Sachs European military basket (fall as much as)-4.1%

Stoxx 600 Banks Index (rise as much as)

4.5 %

Goldman Sachs European military basket (fall as much as)

-4.1 %

Data from the article text

Limits to the post-election rally

Midterm results have historically been good for stocks whichever party wins, but some Wall Street strategists are urging clients to temper their bullishness this time. Barclays said the vote will not settle the doubts over whether AI will pay off and what it costs to fund its buildout. Strategists also flagged the threat of a corporate earnings slowdown. The political shift is additionally described as a threat to the AI trade and the data center boom.