Bitcoin rebounds past $80,000 as markets shrug off midterms and Binance hack

Bitcoin has recovered from its post-Binance hack losses, surging toward $81,000 following Tuesday's U.S. midterm elections, which saw Democrats regain control of both chambers of Congress.

"Markets took the Democratic win in stride," Nexo analysts wrote in their daily dispatch. "Futures fell as much as 2.5% on early counts and then recovered fully, which suggests investors saw the outcome as adding clarity and not as changing the growth story."

Bitcoin (BTC) was up 3.5% to $80,500 on Wednesday afternoon, while Ethereum jumped nearly 6% to $2,433. Solana and XRP were up a more muted 2.5% on the day.

Futures data suggests traders are adjusting existing positions rather than taking on additional leverage, according to Nexo. Crypto futures volume climbed 27%, while open interest rose just 3%, and Bitcoin open interest grew more slowly than its price. Roughly $469 million in leveraged positions were also flushed out.

Nexo said market orders have shifted to a slight net buying bias after favoring sellers the previous day, while the most actively traded Bitcoin options are predominantly calls.

Crypto-related stocks also rallied, with Strategy and Coinbase gaining about 6% each; Strategy's variable-rate perpetual preferred stock STRC hit $100 for the first time since May.

"The case for holding Bitcoin crosses party lines," Executive Chairman Michael Saylor said earlier Wednesday.

Block Inc. jumped 15% following its earnings report, while bitcoin treasury firm Strive climbed roughly 12%. Meanwhile, the Official Trump (TRUMP) memecoin fell 17%.

Why Binance hack had limited impact on bitcoin's price

Bitwise CIO Matt Hougan argued that the market's relatively muted reaction to the Binance hack reflects the crypto industry's growing maturity and improved security infrastructure.

In his weekly blog memo, Hougan examined the 10 largest crypto-related hacks in history and found that Bitcoin finished higher in the following 30 days in five cases and lower in five, suggesting no consistent relationship between major security incidents and Bitcoin's subsequent performance.

He said Bitcoin's roughly 4% decline following the Binance breach was largely in line with broader risk assets, emphasizing that Binance was hacked, not the Bitcoin network.

"Hacks would impact the market if they suggested there is no safer way to hold bitcoin, but there is. In this case, the stolen crypto was held in online hot wallets at a large, integrated crypto exchange," Hougan wrote.

He pointed to institutional custodians, cold storage and spot Bitcoin ETFs as increasingly secure alternatives for investors, highlighting ETFs in particular because their underlying assets are held in offline cold storage and subject to multiple withdrawal approvals and restrictions.

Bitcoin price levels to watch in November

Hougan's assessment was echoed by Matt Mena, crypto research strategist at 21Shares, who said the market's resilience following the Binance breach was encouraging.

"What we find most encouraging is how the market handled the worst of it," Mena wrote in a Tuesday report. "The largest hack in crypto’s history caused a far smaller drawdown than past crises; the protocols kept running, and none of the structural drivers broke: banks, payment networks, and asset managers kept shipping onchain products through the drawdown, and regulators kept writing rules."

Mena is watching four things into November: whether Bitcoin holds $76,000 to $78,000 and sustains its move back above $80,000 to $82,000; Binance's progress in completing withdrawals and proving its reserves; credit spreads, oil prices, and long-end Treasury yields; and whether ETF inflows return.