Bitcoin Dips to $75,740 on Election Night, Recovers Above $77,000

Bitcoin fell to about $75,740 at 10:10 p.m. ET on Tuesday, CoinGecko data shows, as U.S. stock futures dropped on early midterm election results. By 11:55 p.m. it was back near $77,300, up 0.5% over 24 hours.

That round trip took under two hours. It happened while Wall Street was repricing the chance that control of Congress changes hands in January, which matters for crypto because every federal crypto bill has to clear both the House and the Senate.

Futures fell, bonds rallied

Contracts tied to the S&P 500 lost 1.1% and Nasdaq-100 futures slid 2% as results rolled in, CNBC reported at 10:24 p.m. ET. A CNBC Election Desk projection had Democrats winning the House, while the Senate was still undecided at that hour.

Bonds moved the other way. The 10-year Treasury yield dropped nearly 5 basis points to 4.902%, and the 2-year fell 6 basis points to 4.55%. (A basis point is 0.01 percentage point.) When investors buy bonds for safety, bond prices rise and yields fall, because a bond's fixed payments are now worth more relative to its price.

Fund flows were already negative

U.S. spot bitcoin ETFs had net outflows of $115.6 million on Tuesday and ether ETFs lost $85.3 million, Farside Investors data shows. Those figures cover the regular trading day, before polls closed.

What isn't known yet: the final makeup of the Senate. Projections can change as counting continues, and CNBC's House call was a projection, not a certified result. Before the vote, JPMorgan told clients a Democratic sweep could knock the S&P 500 down about 0.5% on Wednesday, CNBC reported.

In our opinion: the move that counts comes after the counting stops. A $1,500 dip that reversed within two hours is small next to a 2% drop in Nasdaq futures. The next thing to check is the Senate call, because both chambers have to agree before any crypto market-structure bill reaches the president.