Bitcoin dropped over 2% to $73,708 and ether fell 5% to $2,223, hitting two-month lows. Markets reacted to a $6 billion Binance heist and the Democratic win at the November 3 midterms. Mike Katz said, “the legislative agenda changes, oversight gets.” These events left many investors worried about future crypto regulations.

While Bitcoin dropped more than 2% to $73,708, ether slipped about 5% to $2,223, both cryptocurrencies’ lowest levels since August.

The massive shake-up comes as markets are already under pressure following a record $6 billion heist at the world’s biggest exchange, Binance.

How Democratic win at the midterms could impact crypto

As the Democratic “blue wave” swept the United States at the November 3 midterms, possibly the biggest blow for the crypto industry came from Ohio. Democrat Sherrod Brown, known as a crypto skeptic, emerged victorious in his race to return to the Senate.

As reported by Reuters, this contest was one of the most expensive in the Senate’s history, with crypto political action committees (PACs) splurging over $60 million to beat Brown.

This, in turn, followed a Senate vote in September that hindered the passing of a major crypto legislation known as the CLARITY Act, which Democrats heavily opposed. Back in July, Democratic Senator Chris Murphy echoed his party’s larger argument in challenging the bill.

“The CLARITY Act is the bill supported by the crypto industry to increase their reach into our banking system and broader economy,” he wrote on social media. “There are many problems with the bill, but most egregious is that is essentially legalises Donald Trump’s crypto corruption scheme.”

Formally known as the Digital Asset Market Clarity Act of 2025, the bill passed the House last year but was ultimately stalled in the Senate.

Since returning to office last year, President Donald Trump has proactively pursued numerous pro-crypto policies, promising to make the United States “the crypto capital of the world.”

As stated by the Binance website, “The CLARITY Act is a proposed U.S. federal law designed to create a comprehensive regulatory framework for cryptocurrencies and digital assets.”

The legislation would allocate greater authority to the Commodity Futures Trading Commission (CFTC) over crypto trading while diminishing the Securities and Exchange Commission’s (SEC) role in overseeing certain digital assets. The latter typically regulates securities (stocks) and asks companies offering them to disclose financial information and investment risks, CNBC reported.

Opposing the CLARITY Act, Democrats have long argued it could weaken investor protections by letting some cryptocurrencies slide under SEC oversight. In light of the Democratic victory sweep at the midterms, Mike Katz, a digital assets specialist and financial services partner at law firm Manatt, told CNBC that, with the election result, “the legislative agenda changes, oversight gets tougher, and the assumption that Washington will keep making life easier for crypto becomes much harder to defend.”

2027 crypto agenda in focus

With more power in the US Congress, House Democrats are now also reportedly discussing rewriting crypto rules in America through a new crypto market structure bill. In a post on X, crypto journalist Eleanor Terrett reported that Democratic lawmakers want to expand previous regulatory efforts under a comprehensive law.

Citing three industry sources, Terrett reported that the new proposal would build on Rep. Maxine Waters’ earlier Crypto Investor and Consumer Bill of Rights. Originally introduced in 2025, the proposal was presented as an amendment to the CLARITY Act, seeking to establish clearer regulations.

Beyond the CLARITY Act, the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) also remains in focus, with its rulemaking slated for January 18. Last month, the Office of the Comptroller of the Currency (OCC) announced a final rule to implement the legislation,

“The GENIUS Act marks a watershed moment in American finance, further cementing the United States as the crypto capital of the world. Just as President Abraham Lincoln’s National Currency Act of 1863 established a national framework for bank-issued currency, the GENIUS Act establishes a federal framework for payment stablecoins in the digital age,” said U.S. Secretary of the Treasury Scott Bessent. “The OCC’s final rule carries that landmark legislation forward, providing a clear, practical foundation for private-sector innovation, competition, and American leadership in digital assets.”