Daily Crypto News | Tuesday, November 3, 2026
Good morning, everybody. Welcome to Daily Crypto News. My name is Matt, and it is Election Day here in the United States.
Before we get started, I want to thank Chris L., Friend, and Francesco K. for the encouraging messages on Spotify. Some of you have been listening since the Crypto Daily days, which takes us back several years. I really appreciate that you’ve stuck around for so long.
Today, Americans are voting to determine control of the House, the Senate, and a whole lot of state and local offices. And while we’re going to be watching the political results tonight, I think there’s an equally interesting question about what happens to the markets afterward.
Bitcoin is still sitting around $77,000. We’ve had more than $1 billion leave spot Bitcoin ETFs over two trading sessions, another cryptocurrency exchange has been hacked, and the artificial intelligence industry is dealing with some increasingly serious cybersecurity questions.
So we’ve got plenty to talk about.
Midterm Elections and the Historical Case for a Market Rally
I was watching a video from Bravos Research yesterday, and one thing they do particularly well is look at financial markets over decades rather than just the last six months.
They were discussing how markets historically behave around midterm elections.
The argument is that stocks frequently experience uncertainty and selling pressure leading into an election, followed by stronger returns afterward.
Historically, the S&P 500 has averaged roughly a 14% gain in the 12 months following midterm elections, depending on the period and methodology used.
That’s an interesting statistic.
One explanation is that elections remove uncertainty. Investors know who’s controlling Congress, what the political balance looks like, and how difficult it will be for an administration to pass its agenda.
And if government is divided, legislation often moves more slowly.
You have a president who wants to accomplish something, but the House or Senate might be controlled by the opposing party. Suddenly, everything requires negotiation, compromise, or simply doesn’t happen.
Markets tend to appreciate predictability.
Maybe there’s a lesson in that. When government stops constantly interfering with capital markets, capital markets have an opportunity to work.
But I’m not quite as optimistic as the historical averages might suggest.
We have geopolitical conflicts, concerns about Iran, questions about artificial intelligence, and a political environment in Washington that I think could become considerably more contentious after tonight.
If Democrats gain control of the House, I expect more congressional investigations into the Trump administration, including questions about the president’s cryptocurrency interests, artificial intelligence, ethics, and the relationships between government and private companies.
Now, Democrats wouldn’t suddenly have unlimited legislative power.
Trump would still have his veto. Overriding that veto requires a two-thirds majority in both chambers, and most Senate legislation still faces the 60-vote threshold to overcome a filibuster.
So I don’t expect a dramatic wave of new laws.
I expect investigations, committee hearings, subpoenas, and plenty of political rhetoric.
Some of those investigations may be warranted. Others may be designed primarily to grab headlines.
And that’s where I think the historical argument about stability becomes less convincing.
Gridlock might slow legislation, but it doesn’t necessarily mean Washington becomes quieter or that investors stop worrying about politics.
We’ll start getting answers tonight.
Bitcoin ETF Investors Withdraw More Than $1 Billion
Bitcoin is trading around $77,000 this morning, and the spot ETF numbers aren’t particularly encouraging.
On Friday, October 30, U.S. spot Bitcoin ETFs recorded approximately $643 million in net outflows.
Then on Monday, November 2, another approximately $399 million left the funds.
That’s more than $1.04 billion in net outflows across two trading sessions.
And remember, these are investment products that were supposed to help bring more institutional participation into Bitcoin.
They have done that, but institutional investors can sell just as easily as they can buy.
It doesn’t mean Bitcoin is collapsing. It does mean we’re seeing meaningful capital leave those products at a time when the market is already uncertain.
I’m watching whether that trend continues after the election.
We also have Cathie Wood and ARK Invest making some moves.
ARK purchased approximately $3.4 million in Coinbase shares, $2.6 million in Circle, and about $646,000 in Robinhood on Monday.
Now, before anybody starts screaming that Cathie Wood is going all-in on cryptocurrency, remember that she manages substantial investment portfolios.
She buys, sells, and rebalances regularly.
These purchases are relatively small compared with the size of the funds she manages.
ARK also sold approximately $2.3 million in Bullish shares that day.
So I wouldn’t look at these purchases alone as some enormous bullish signal.
She’s adjusting her exposure to companies she already follows closely. Maybe she sees an opportunity after prices declined. Maybe she’s adjusting allocations for other reasons.
Either way, I wouldn’t build an entire market thesis around one day’s ARK trades.
Binance Withdrawals Normalize as North Korea Rejects the FBI’s Accusations
We’re still following the aftermath of the $6.3 billion Binance hack.
Binance says customer withdrawals have largely returned to normal and that approximately 95% of the affected assets have been replenished.
That’s an important distinction from recovering the stolen cryptocurrency itself.
The exchange has used its own financial resources to replace assets backing customer balances, while investigators continue trying to freeze and trace funds associated with the attack.
Binance co-CEO Richard Teng says the company remains in strong financial health.
That’s encouraging, especially after the billions of dollars customers withdrew when the platform reopened.
But we’re still waiting for the full technical explanation of how this happened.
Meanwhile, North Korea is publicly denying responsibility.
The FBI has attributed the attack to TraderTraitor, a North Korean hacking operation. Kim Yo Jong, the sister of Kim Jong Un, has rejected those accusations and accused Washington of using the incident for political purposes.
Now, I have a question.
What political purpose?
North Korea is already heavily sanctioned and isolated from much of the international financial system.
Is Washington supposedly trying to convince people to dislike North Korea more?
I’m not entirely sure what argument she’s making.
But North Korea has been linked to major cryptocurrency thefts before, including the Bybit attack in 2025.
And the FBI’s attribution is substantially more specific than somebody on X speculating about where the hackers might live.
We’ll continue following the investigation, especially what happens to the remaining stolen assets.
Another Crypto Exchange Gets Hacked: Mercado Bitcoin Loses Millions
Unfortunately, Binance isn’t the only exchange dealing with a security breach.
Brazil’s Mercado Bitcoin confirmed a security incident on Monday, with initial estimates placing the affected assets at approximately $46 million.
Some blockchain investigators have since calculated losses closer to $49 million.
The exchange temporarily suspended deposits and withdrawals while investigating.
Mercado Bitcoin says customers will not bear the losses, and blockchain intelligence firms have been working to trace and freeze the stolen funds.
Chainalysis reported that its investigators helped coordinate the freezing of nearly $10 million.
The attack affected assets across multiple blockchain networks.
And while the timing is certainly concerning, there is currently no public evidence establishing that the Mercado Bitcoin incident was connected to the Binance hack.
That’s important.
Just because two exchanges are attacked within a few days doesn’t mean the same hackers were responsible.
But it does raise a bigger question about the security infrastructure that cryptocurrency companies are relying on.
How many of these platforms have vulnerabilities that haven’t been discovered yet?
And how much more sophisticated are attackers becoming?
That’s especially relevant to the next story.
Anthropic’s Claude Finds Serious Software Vulnerabilities as Connected Refrigerators Get Hacked
Anthropic researchers recently disclosed that an experimental version of Claude identified serious vulnerabilities in widely used software and developed working exploit chains.
The research included vulnerabilities affecting operating systems and web browsers, with some attack scenarios requiring little or no user interaction.
That’s impressive from a cybersecurity research standpoint.
It’s also a little terrifying.
We’re talking about artificial intelligence systems becoming capable of finding weaknesses that could potentially give attackers access to critical infrastructure.
Now, Anthropic’s research was conducted as security testing, with vulnerabilities reported to the affected vendors.
That doesn’t mean Claude was independently attacking random servers on the internet.
But it demonstrates what increasingly capable AI systems may be able to do.
And speaking of technology we probably didn’t need to connect to the internet, apparently supermarket refrigerators across Europe have been experiencing cyberattacks.
Retailers in Sweden, Belgium, Luxembourg, Ireland, and other countries reported refrigeration systems being manipulated or disrupted.
Some stores had to remove food because the temperature controls were compromised.
And I’m sitting here asking a very basic question.
Why does my refrigerator need an internet connection?
Seriously.
I saw a meme yesterday using the Mad Men advertising-pitch format, where somebody proposes a revolutionary new product: a refrigerator that isn’t connected to the internet.
That’s funny because it’s becoming a legitimate selling point.
We keep connecting everything to networks because it’s convenient.
But every connected system potentially introduces another security problem.
When that system controls food storage, heating, manufacturing, or other physical infrastructure, the consequences can go well beyond somebody losing access to an app.
Consensys Connects Institutional Blockchains, and NEAR Moves to Reduce Token Issuance
There are also some interesting developments happening away from the hacks.
Consensys announced a new institutional interoperability technology at Devcon in Mumbai.
The system, called Sovereign Network Interoperability, is designed to let banks and other financial institutions coordinate transactions across separate blockchain networks.
That includes securities settlement, cross-border payments, and collateral transfers.
The important part is that institutions can coordinate those transactions without necessarily moving the underlying assets away from their original networks.
For traditional finance, that’s a potentially useful development.
Banks aren’t all going to abandon their existing systems and move everything onto one public blockchain tomorrow.
They have different regulatory requirements, privacy obligations, and infrastructure.
So creating technology that allows those systems to communicate could be another step toward broader blockchain adoption.
We also have an update from NEAR Protocol.
Its governance community approved a proposal to gradually reduce the network’s maximum annual token issuance rate from 2.5% to 1.6%.
That would happen over 24 months, after the remaining approvals and network upgrades.
The basic idea is to reduce the rate at which new tokens enter circulation.
That doesn’t automatically make the price go up, but it changes the network’s supply dynamics and could reduce dilution over time.
Crypto Prices and What I’m Watching Today
Here’s where the market stood during this morning’s recording.
Bitcoin: $77,280, down approximately 0.5% over 24 hours
Ethereum: $2,280, down approximately 0.2%
BNB: $700, down approximately 0.4%
XRP: $1.28, up 2.7%
Solana: $93, down approximately 1%
TRON: $0.321, up 1.5%
Hyperliquid: $85, down approximately 0.4%
Zcash: $1,205, down 3.2%
Total cryptocurrency market capitalization: approximately $2.6 trillion
Fear & Greed Index: 35, Fear
These are prices from the recording, not live market quotes.
Today I’m watching the election results, whether Bitcoin ETFs continue experiencing outflows, and whether Binance provides further updates on its remaining affected assets.
We also have U.S. job openings data that could influence expectations about the Federal Reserve.
And of course, there are geopolitical developments involving Iran that could affect the broader market.
My Take
I think we’re in an unusual situation.
Historically, midterm elections have often been followed by strong stock market performance. There’s legitimate data supporting that observation.
But historical averages don’t tell us everything about the environment we’re dealing with today.
We’ve got a divided political atmosphere, geopolitical conflicts, a cryptocurrency industry recovering from enormous security breaches, and artificial intelligence technology advancing faster than many institutions can respond.
And through all of this, Bitcoin is just going sideways.
I’m not particularly concerned about whether Bitcoin briefly drops to $76,000 or $75,000. We’ve been trading in a broader range, and moving around inside that range doesn’t necessarily change the overall picture.
What interests me more is whether institutional money starts returning, whether the political uncertainty settles down after tonight, and whether these security incidents produce any meaningful changes in how exchanges protect customer assets.
I’m also increasingly concerned about how much of our everyday infrastructure is connected to the internet.
We’ve gone from worrying about hackers stealing passwords to worrying about attackers interfering with financial exchanges, hospitals, and even grocery store refrigerators.
That’s a significant change.
As for the election, go vote. We’ll see what happens tonight.
Tomorrow’s show will probably be considerably more political as we work through the results and what they might mean for the markets.
Thanks for listening, everybody.
Happy HODLing