Post-midterm market rally sends Bitcoin above $80K and stocks higher
A solo market commentary from the Digital Asset News host analyzing the post-midterm price action across Bitcoin and equities, alongside news on Canton, Block, Peter Schiff, and a lawsuit against World Liberty Financial.
Summary
The Digital Asset News host opens by comparing the current post-midterm market reaction to the 2022 midterms, when Bitcoin dropped sharply amid the FTX collapse, contrasting that with the current rally from roughly $75,700 to over $80,000. He notes the S&P 500 and QQQ are also up, while AI and data center stocks are pulling back due to uncertainty about the incoming administration's stance on those sectors. He then covers several news items: Canton receiving a no-action letter from the SEC classifying it as a commodity; Jack Dorsey's Block facing a $764 million DOJ settlement over AML failures; Peter Schiff's Puerto Rico bank remaining in a troubled liquidation nearly four and a half years on; and Justin Sun suing World Liberty Financial — the Trump-affiliated crypto project — alleging fraud and the unlawful freezing of his tokens.
Key Takeaways
FULL TRANSCRIPT
Post-Midterm Market Reaction: Bitcoin and Stocks
The midterms are behind us and the market has responded quite favorably — it's looking pretty good. Going back four years to the previous midterm election, which was around the same time FTX collapsed, we can see that Bitcoin over 24 hours told a very different story. The last midterm election was November 8th, and within 24 hours — from the 8th to the 9th — Bitcoin went from $18,542 down to $15,855. That was quite a precipitous drop in a small amount of time. Now, was that a midterm-driven move or was that FTX? Probably a lot of things were going on back then.
Looking at the S&P 500 on a macro level at that same time, it was also not a great period. From November 8th, they closed at 3,828, and then the next day within 24 hours the low was 3,744, closing at 3,749. So four years ago — not so good. But this one is looking pretty good. I like these numbers.
I was hoping for a little bit of a dip, but I buy Bitcoin every Monday so it's not a big deal either way. We'll see if this lasts. Within 24 hours we went from a low of around $75,700 all the way up to over $80,000 — almost $81,000. That is a heck of a jump.
Historical Context: Was It Always Like This?
Was this always the pattern? Was this just because of a certain group of candidates? Well, no, not really. Going back to 2018, we actually did the exact opposite — Bitcoin went from $6,461 to $6,530, quite a tight range, though it did go up. In the two previous midterms, the S&P 500 also moved similarly.
Interestingly, if we go back four years, we were roughly half of where we are now. Back on November 4th of that cycle, we were almost 70% down from the all-time high of $67,617. Now we're only down 36%. So if this is your first bear market — this isn't nothing. This is not too bad. We'll see how it plays out, but I do expect some big volatility, especially in the AI sector.
Equities: S&P 500, QQQ, and AI Stocks
The S&P 500 today is up — let me refresh this because we just had a close. Yeah, look at that. S&P 500 almost 7,700. Not too bad. The QQQ, which covers more tech stocks, is at 691, up about 0.86% — almost a full percentage point. Pretty great.
The things that aren't doing so great have to do with AI, data centers, and a little bit of energy. The reason is that the incoming party is not too keen on data centers, and I think there's some price action reflecting that. SpaceX dropped 4% today. Tesla is down around 3.45–4.5%. Bloom Energy, which is one of the poster children for electricity supply into data centers, has seen a pretty big drop. I think it's going to be like that across the board for a while.
Right now there is a lame-duck session until the new senators and new House members come into Congress. There's a lag — I believe it runs into December or the first of the year when the new group is seated. They really can't get much done in the meantime, and the new laws and regulations are going to take a while to come through. It's going to be a wait-and-see situation. Interesting times.
Canton Receives SEC No-Action Letter — Classified as a Commodity
Let me know what you think about all that in the comments. We can't focus too much on just one aspect — we have to look at where things are going. As I've always said, it's great to know where the hockey puck is, but it's better to know where the hockey puck is going.
This comes from Matthew Sigel, CFA, who is the head of digital assets research at VanEck. This was pretty big news: Canton gets a no-action letter from the SEC, which says the coin is a commodity. That's pretty great. The SEC is essentially saying, "You're not a security." The reason is that there's no central party — it is properly decentralized. Which means we have a little bit of clarity about where it's supposed to go: if it's a commodity, that falls under the CFTC. That's good news for Canton coin. I have a little bit of it, so I'm biased — we'll see how it works.
Even Matthew Sigel, who is pretty straight and narrow on what's happening in the crypto space, gets caught up in politics in the same post. He writes: "My last day in New York is December 8th. This is the final straw." He's referencing Letitia James retaining her position as attorney general. So Matt is not happy about that. It's just going to be volatile moving forward. We have to deal with our sphere of control, and our sphere of control is sometimes buying Bitcoin and understanding that even the big players get caught out.
Jack Dorsey's Block Faces $764 Million DOJ Settlement
Jack Dorsey looks like he's going to pay three-quarters of a billion dollars to the Department of Justice. As you know, every Monday I use Cash App, which is under the umbrella of Block. When you set it up for recurring buys, there are essentially no fees — very minimal — and the spreads are great.
So I was surprised to see this headline: Jack Dorsey's Block faces $764 million Department of Justice settlement as Bitcoin profit plunges 50%. And you know why the profits went down? It says right here — the reason Cash App's contribution to Block's quarterly Bitcoin gross profit plunged 50% is that the Cash App trading fees, which is what I use, are pretty much null and void. That's why they don't have as much revenue from that line — but that was Jack Dorsey's decision, to keep fees low so people can buy Bitcoin easily.
Block has agreed in principle to pay $764 million in a proposed settlement — larger than the $566 million profit it reported for the third quarter. If you think about it, you're giving up roughly 24–25% of a year's profit. That's just going to go right to the government. Sounds like most of us, actually.
This was brought about by an SEC filing. It was deferred for three years — a criminal charge alleging that Block failed to maintain an effective AML, or anti-money laundering, program as required under the Bank Secrecy Act. The proposed resolution carries a gross monetary component of approximately $964 million, reduced to $764 million after credits for earlier regulatory settlements. I don't know exactly what's going on over there at Block, but it looks like the government is on them.
Peter Schiff's Puerto Rico Bank — Still in Troubled Liquidation
It's not just Jack Dorsey. Did you guys know that Peter Schiff had a bank in Puerto Rico and it was shut down four and a half years ago? I totally forgot about this. Here's Peter complaining:
Peter Schiff (quoted): "The liquidation of my bank by Puerto Rican banking regulators has been a complete disaster. The OCIF commissioner had no legitimate regulatory reason to put the bank into receivership, as none of the customers' accounts were at risk and superior alternatives were available that would have fully protected customers and allowed uninterrupted access to their deposits. Almost four and a half years — complete incompetence, regulatory failure."
And the bad part, he says, is that customers will eventually receive only a fraction of what they are owed, and many may end up losing 100% of the value of their accounts due to gross negligence and outright theft.
It's amazing how these banks and exchanges just crumble. And it's also amazing who stays out of jail and who goes to jail — not saying Peter is going to jail or should go to jail, just that it's interesting how these things collapse and some people just don't get their money back and that's apparently just how it is. The regulatory environment and what gets picked off is remarkable.
Justin Sun Sues World Liberty Financial — Trump's Crypto Project
And then lastly, I think this was one of the more interesting stories. Justin Sun is suing Trump's company, World Liberty Financial, because World Liberty Financial apparently is a citizen of the Middle East — domiciled in the UAE. This is a crazy story.
Justin says: "Last night, my lawyers moved to sanction World Liberty Financial for failing to disclose for months in my litigation that it sits in the UAE. In November 2024, I agreed to buy $30 million of World Liberty Financial tokens under a token purchase agreement with World Liberty, and I later increased my total investment to $45 million."
Look, I'll just say right now — I think Justin probably got a really sweet deal to make that investment. He probably got in at whatever they launched it at, probably fractions of a penny on the dollar. So don't feel too bad for Justin. I think he's going to be just fine. But it is interesting that he's suing the president's company. I think there are a lot of things coming down for President Trump in the next two years.
He continues: "In April, I sued World Liberty, alleging that the company induced my investments through fraud and then unlawfully froze my tokens." He also explains that federal courts can hear a case like his only when the two sides come from different places — foreign plaintiffs like him can sue an American defendant and be heard in America. So the UAE domicile of World Liberty Financial is a key jurisdictional issue.
Let's see how this all plays out for Justin Sun as he goes through the process.
Q&A and Viewer Comments
As a quick reminder — as we talked about yesterday, there are going to be some volatile times ahead, so this might be a reasonable moment to consider dollar-cost averaging. I know I'll be buying, especially on Monday.
CR was asking: "I don't know, Rob — Bitcoin Sessions or Dan? You're both live at the same time. Who do I choose?" I told him, "Stick around and I'll give you my next 10,000x altcoin gem." I remember saying things like that in 2021.
Speaking of 2021 — yesterday I was reminiscing about how exciting that period was, and then I basically told everybody how kind of boring the current timeframe is because bear markets are boring. People said, "Rob, it seems like you're down on the market." It's like working out. Does everybody feel pumped to go to the gym every single day? No. But they know it's good for them, so they go and they slug through it. Some days they're hyped up, some days not so much. It's the same with the show. Most days feel pretty good. Some days I feel like I'm just dragging. But today I'm just glad the midterms are behind us and maybe we can stop so much infighting and just move forward and focus on the fact that we're in it for the tech — which is number-go-up technology.
Bitcoin Sessions apparently threw chairs during a live stream. I have not seen that. That's pretty good.
All Roads is here. Gig Dice is here. Someone says: "I DCA'd and doubled up under $80K, plus snatched some SOL under $100 — but hyped at night." Midnight is looking pretty good. If the next narrative is privacy, then Midnight is looking pretty great. And of course people say, "What about Zcash?" Yeah, I know — I'm just bitter because I missed it. Good for you guys if you hit it. But privacy could be the next big thing.
A1 Rising says Democrats were going to destroy the country. Eh — it's always the other party that's going to destroy something. That's just how it goes. I think it's just a referendum. Nobody wanted the ongoing wars, and here we are, just keep going and going, and people are getting sick and tired of it. People voted because of the economy. Now, the market is not the economy. The crypto market's great, Wall Street's great — but talk to anybody about buying products, paying for gas, paying rent. It sucks. And a lot of people are saying the same thing. That's why they voted the way they did. Very simple.
Rusty Bot is here. Just in: the Moscow Exchange will start trading Bitcoin on December 1st. I like that.
Robbie asks about Kraken for altcoins: "Have you used Near Intents for lower fees?" Near Intents, as I understand it, is a swapping service — if you have one crypto and want to move into something else, you can find routes across different chains. But you have to already have crypto, like a stablecoin, to go that route. I'm not going to bounce around a lot. I'll just stick with Kraken. Near Intents, though, is interesting if you're waiting for AI agents to use it for payments — I think that could be the next thing as it actually rolls out.
Five Point says it's about to get a lot worse. We'll see. Every time everything is supposed to fall apart, it doesn't. And then the next worst thing of all time comes along. Usually it's the things we believe in our minds are going to be worse that make it worse. There's only so much we can control. I can control my little piece — my short-term and medium-term rental businesses, collecting rents on apartments, doing the second channel over at Dane. That's all I can really do. So I just focus on that and keep moving forward.
Closing Thoughts
I think we've all got something to hang our hat on as we move into the next sector of whatever comes after getting through the midterms. We know the midterms suck, and now we're potentially into the accumulation stage as we go to the next evolution of whatever happens. I think this is a win. I'll be buying Bitcoin every Monday and continuing to buy some select altcoins — you all know where those are.