Bitcoin declined to its lowest level in more than a month during Tuesday’s trading session, extending its recent downward trend as uncertainty surrounding U.S. cryptocurrency regulations and legislation ahead of the midterm elections prompted investors and traders to reduce their exposure to riskier assets.
The losses were not limited to Bitcoin, as the broader cryptocurrency market remained under pressure following a major security breach at Binance over the weekend, which reportedly resulted in the theft of digital assets worth more than $6 billion. Although the exchange announced the gradual resumption of withdrawals and pledged to cover all customer losses, market sentiment remained weak.
Bitcoin, the world’s largest cryptocurrency by market capitalization, fell 2% to $76,565.9, reaching its lowest level since late September. The latest decline extended its recent losses after the cryptocurrency recorded a drop of more than 6% in October.
Additional pressure came from substantial outflows from cryptocurrency exchange traded funds (ETFs), as institutional investors reacted to the reported Binance security breach. This coincided with a broad selloff in technology stocks, further reducing demand for higher risk assets amid growing concerns over excessive spending on artificial intelligence infrastructure and development.
Cryptocurrency investors are closely monitoring the U.S. midterm elections for indications of the future regulatory environment. The results are expected to influence the legislative agenda for the remainder of President Donald Trump’s term. The elections come as the Republican Party faces several political challenges and declining approval ratings, partly driven by public dissatisfaction with elevated energy prices and recent political and military developments.
Market observers believe that Democratic control of Congress could weaken the prospects for passing legislation supportive of the cryptocurrency industry over the next two years, particularly following the failure of the CLARITY Act to advance through Congress earlier this year. Consequently, any Republican losses could leave cryptocurrency regulation largely dependent on executive actions, which can be reversed or modified by future administrations. These concerns have encouraged investors to reduce their market positions and contributed to the absence of Bitcoin’s historically strong October performance for the second consecutive year.
Bitcoin’s losses also weighed on major alternative cryptocurrencies. Ethereum, the second largest cryptocurrency by market capitalization, declined 1.4% to $2,253, while XRP remained relatively unchanged. Solana fell 2.7%, Cardano dropped 1.5%, and BNB lost 1.7%. Meanwhile, meme coins also came under selling pressure, with Dogecoin declining 2% and the TRUMP token falling 5.5%.
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