A post-election rally in Bitcoin reversed on Friday as markets worried about the regulatory outlook under a Democrat-controlled U.S. Congress. A broader drop in risk appetite and losses across major altcoins added to the pressure.
Bitcoin fell 5.1% to $76,235.6 by 05:39 ET on Friday. The drop reverses its post-U.S. election rally, and the token is heading for weekly losses as investors weigh what a Democrat-led Congress means for crypto.
The token was set to lose over 2% this week, its fifth straight week in red. Initial optimism over the midterm elections has given way to doubts.
Regulatory doubts weigh on Bitcoin
Democrats have historically expressed more skepticism toward crypto, with Senator Elizabeth Warren among the major voices calling for a broader crackdown on the sector. Bitcoin's record under the last Democrat-led Congress, between 2021 and 2022, was mixed, and it resulted in a 43% drop.
That period, however, also saw rising U.S. interest rates and several high-profile bankruptcies, chiefly Terra, FTX and Celsius.
Democrat opposition to the Clarity Act resulted in the legislation failing in Congress earlier this year. Democrat lawmakers have also called for more anti-money laundering and risk management measures in crypto, which most industry proponents argue will stifle innovation.
Separately, major miner Riot Platforms disclosed this week that it sold most of its Bitcoin holdings in the third quarter.
Altcoins and the Trump memecoin slide
Selldowns in U.S. tech and artificial intelligence stocks dented sentiment across the sector. Ether fell 7.2% to $2,243.0 and is down 1.5% this week, headed for a sixth straight week in red.
XRP slid 8.9% and BNB fell 2.8%. Solana and Cardano each fell more than 6%, while Dogecoin fell 5.8%.
The Trump memecoin, $TRUMP, wiped out over 22% this week and hit a record low of $1.116 after the Republican party suffered losses in the midterm elections. It has lost about 99% of its value since reaching a record high of $73.43 shortly after launch.
Source: Investing.com
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