An unexpected twist

Bitcoin and the broader crypto market on Wednesday took part in a surprise risk-on rally with Wall Street declaring a victory for democracy itself following Tuesday’s midterm elections. Republicans across the U.S. got shellacked, President Trump, repudiated. “Big D” Democrats won control of both chambers of Congress.

The Dow's response to the Democrats' decisive sweep was to unambiguously shoot up 1,569.50 points (+3%) for its best day since April of 2025. Trump not crying foul about results apparently did most of the heavy lifting. However, those gains were erased as of late Thursday morning as markets sharply reversed course and sold off.

Bitcoin yesterday joined in the climbing expedition. As of Thursday at 7 a.m. (EST), the largest crypto had firmly reclaimed the $80K mark. By 8 a.m. (EST), though, a modest pullback to $79.9K had ensued. A few hours after that, in yet another unforeseen plot twist, BTC skidded toward $75K.

Broader enthusiasm for stocks (with the exception of AI-related companies) at least briefly helped buoy the biggest altcoins. At its highest point yesterday afternoon, Ethereum reached $2,442. As of this morning, ETH was about $2,390, up 4% over the past 24 hours. XRP and SOL gained 2% and 3%, respectively.

The Nasdaq plunged 5% in an ugly start to Thursday. A shakeout seemed imminent overnight even as investors were still celebrating a massive day for the Dow.

However tech stocks began sliding in today’s pre-market trading action, a reflection of investors more fully digesting impending policy shifts. 

Data center blowback seems full on and front of mind. Neocloud standard-bearer CoreWeave fell nearly 4% while speciality-AI-compute cohorts Iren and Nebius each shed 3%.

Chipmaker Qualcomm released better-than-anticipated earnings — and still its shares tumbled 9%. It seems the future earnings outlook isn’t quite as rosy as expected.

Tuesday’s defeat of Texas Governor Greg Abbott was probably the least expected political outcome imaginable. The stunning win by his Democratic challenger, Texas state Rep. Gina Hinojosa, was in part fueled by her promise to deliver an extended, stricter moratorium on new data center builds. As recently as late last year, Abbott was aggressively championing data centers, although, amidst growing public unease, he more recently shifted his stance, imposing a temporary pause and calling for restrictions.

Jordan Watson, a portfolio manager at Tandem Investment Advisors, told CNBC the outsized rally in old-fashioned industrial stocks alongside a slumping Nasdaq could be seen as “a call for some sanity” surrounding the AI infrastructure build-out.

Official Trump (TRUMP) has plunged 18% in the past 24 hours. Also in decline over that time frame is WLFI, governance token of World Liberty Financial, a Trump-family backed DeFi platform. WLFI lost 7% since this time yesterday. Trump’s crypto deals are seen as about to come under intense scrutiny on Capitol Hill.

“The election results could not only make it harder for Trump to push forward his crypto plans,” said Cointelegraph, “but also bring more scrutiny to his family’s crypto businesses.”

It’s not clear whether political memecoins ever had anything resembling staying power in the first place. Still, the category’s total market capitalization sits at roughly a half-billion dollars — even after falling 16% on the day. Among the biggest losers were MELANIA, a Solana-run memecoin issued by a company with ties to First Lady Melania Trump, and VANCE, which has no apparent ties to the sitting vice president.

Benjamin Sarquis Peillard, CEO of Cap, a stablecoin yield platform, told Cointelegraph that politically connected tokens can be exceedingly sensitive to shifts in Washington, D.C. 

“Even as the broader market recovers,” he said, “those tokens may face selling pressure if investors begin reassessing their risk exposure.”

But a more obvious and far-reaching question jumps out today, Peillard added.

“What,” he asks, “supports demand for these tokens beyond their association with a political figure?”