Democrats Won Control of Both Chambers of the US Congress, Flipping at Least Seven Senate Seats

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In Today's Note

• BTC fell to $75K, a nearly two-month low, before recovering to trade back above $78K, while US job openings rose by 333,000 to 7.523M in September, a four-month high.
• The CFTC approved perpetual futures tied to individual company stocks for the first time in the US, while South Korea's ruling Democratic Party proposed postponing the 22% tax on crypto gains due to start in January 2027.

Market Snapshot: Overnight Moves

Macro & Markets

• After initially falling to $75K, a nearly two-month low, BTC erased its losses in a v-shaped recovery and is now trading back above $78K as the US midterm election uncertainty fades away.
• The wider crypto market and US equities saw a similar recovery too.
• ETH briefly fell to $2,200 before having its own v-shaped recovery while futures for the S&P 500 are up 0.6% and those for the Nasdaq-100 have gained 0.5%. Both futures contracts had fallen earlier in the session before buyers stepped in.
• Meanwhile, the US dollar weakened with the DXY down 0.56% over the past 24 hours and US treasury yields briefly fell across the curve, though have started to move higher again.

• The initial losses in risk-assets coincided with the news that the Democrats had won control of both chambers of the US Congress in a landslide midterm election victory.
• Across the country, Democrats secured victories in GOP strongholds, flipping at least seven Senate seats according to Bloomberg and winning House races in districts that Republicans had dominated in 2024.

• Speaking to Fox News after the election was called, President Trump claimed that “part of” the reason his party had lost were price increases from the US-Iran conflict.
• Nonetheless, Trump defended his decision to start the conflict and said he didn’t plan to make any changes to his Cabinet.
• “Congratulations to the Democrats. They did a good job. They’ve been looking for this one for 11 years, and they finally got it. But I don’t view it as a hit on me,” Trump claimed.
• He also told Fox News that he intends to block legislation that the Democrats may seek to pass, “They’ll send over things that are insane, and I’ll veto them. And after a couple of months of vetoes, they’ll call and they’ll say, ‘How do we get this stuff done?’ And we’ll work together” Trump said.

• Separately, the BLS’s Job Openings and Labor Turnover Survey, or JOLTS report, showed optimism for the resilience of the US economy and labour market.
• Job openings, a measure of labour demand, rose by 333,000 to 7.523M in September, a four-month high, while layoffs fell to their lowest level since March 2025.
• Additionally, the quits rate, which measures the percentage of people voluntarily leaving their jobs each month, climbed to 2.1%.

• On the geopolitical front, in an interview with the Financial Times, President Trump said the US has no immediate plans to strike Iran, downplaying speculation that his government was preparing to escalate the conflict after the midterm elections.
• In the six-minute telephone interview Trump said, “We seem to be getting everything we want” and that “I’m ready, we’re ready. We’re locked and loaded if we need to go, but there may be no reason for it.”

DeFi / Web3 / Altcoins / Crypto

• Binance has released an Initial Findings and Response Update following its $6.34B hack on October 29, 2026, revealing that North Korean attackers used fake recruitment interviews, malicious software and a compromised internal AI tool to gain access to its wallet-signing infrastructure.
• The attackers exploited stolen deployment credentials and Ethereum's EIP-7702 mechanism to authorize fraudulent withdrawals across multiple blockchains, including 18,270 BTC, 233.46M XRP, approximately 970,500 SOL and 44.2M OP, while using 50 signing transactions to establish malicious wallet permissions that remained active even after withdrawals were suspended.
• Binance reported that $2.85B in stolen assets had been frozen or intercepted and 98% of affected tokens had been replenished as of October 31, while rebuilding compromised systems, revoking malicious authorizations and strengthening wallet security and AI-based threat detection.

• The Commodity Futures Trading Commission (CFTC), the US derivatives regulator, has approved perpetual futures tied to individual company stocks for the first time in the US, allowing regulated exchanges to offer contracts that track share prices without requiring investors to own the underlying stocks and offer leveraged exposure.
• CFTC Chair Michael Selig said the products would support risk management and price discovery, with both the CFTC and Securities and Exchange Commission (SEC) responsible for regulatory oversight.

• The SEC's Division of Corporation Finance has classified Canton Coin (CC), the native token of the institutional blockchain Canton Network, as a digital commodity for purposes of its no-action position, agreeing not to recommend enforcement action over programmatic token issuance by validators and application providers under specified conditions.
• The SEC staff cited Canton's decentralized structure and token value driven by network activity rather than reliance on a central management team, although the letter is limited to the described arrangements and does not constitute a legally binding determination that CC is not a security.

• South Korea's ruling Democratic Party has formally proposed postponing the cryptocurrency income tax scheduled for January 1, 2027, arguing that the country should first implement the Digital Asset Basic Act and establish the necessary regulatory infrastructure.
• The proposed tax would impose a 22% rate on annual crypto gains exceeding ₩2.5M ($1,869), while the government is reportedly considering delaying implementation until 2029, which would mark the fourth postponement since the tax was introduced in 2020.

• Liquid Network, a Bitcoin sidechain developed by Blockstream, has restored full 1:1 BTC backing for its LBTC tokens following a $320M exploit on September 6, when attackers exploited a range-proof verification bug to create approximately 4,000 unbacked LBTC and withdraw real Bitcoin through SideSwap.
• The attacker returned roughly 3,400 BTC, while Blockstream supplied the remaining 600 BTC through deposits of 50 BTC on October 28 and 300 BTC and 250 BTC on November 2, restoring reserves after the vulnerability was patched, although some direct withdrawal restrictions may still remain.

• Tron founder Justin Sun has requested court sanctions against World Liberty Financial (WLFI), a Trump-linked DeFi project, alleging it concealed ties to the United Arab Emirates during their ongoing legal dispute over his $45M investment in WLFI tokens.
• Sun originally sued World Liberty for fraud and unlawfully freezing his tokens, but claims the company later expanded its ownership disclosures from one entity to 22 members, revealing UAE ties that could prevent the case from proceeding in US federal court.
• Sun plans to refile his lawsuit in California state court after the sanctions motion is resolved, while World Liberty has countersued him, alleging his original legal action was a publicity stunt.

This Week's Calendar

Charts of the Day

Figure 1. Block Scholes BTC Risk-Appetite Index (white, left-hand axis) and BTC spot price (orange, right-hand axis). Source: Deribit, Block Scholes.

Figure 2. Block Scholes ETH Risk-Appetite Index (white, left-hand axis) and ETH spot price (purple, right-hand axis). Source: Deribit, Block Scholes.

Figure 3. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

Figure 4. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

Figure 5. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.

Figure 6. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.