Bitcoin Reclaims Market Confidence Above $80K as Zcash Gains 12%

Ether gained 8% as falling oil prices and a weaker U.S. dollar boosted sentiment across financial markets. However, cryptocurrency investors remained cautious about the potential impact of Democratic control of Congress on the future of U.S. crypto legislation.

Bitcoin climbed above $80,000 on Thursday as digital assets joined a broader recovery in global equities following Democratic victories in both chambers of Congress. Zcash led gains among major cryptocurrencies, rising nearly 12%.

According to CoinGecko data, Bitcoin traded around $80,484 during Asian trading hours, marking a 5.7% gain over the previous 24 hours. Ether increased 8% to approximately $2,425, while XRP rose 4.7% to $1.31. Solana advanced 5.9% to $96, and BNB gained 4.2% to roughly $715.

Zcash surged 11.7% to around $1,318, supported by daily trading volume of approximately $1.2 billion. The privacy-focused cryptocurrency allows users to conduct encrypted transactions, concealing information such as sender and recipient identities and payment amounts.

The rebound followed an initial market sell-off after the U.S. election results. Bitcoin briefly dropped toward $75,700 early Wednesday before recovering as buyers returned to the market.

Jeff Mei, chief operating officer at cryptocurrency exchange BTSE, told CoinDesk that Bitcoin’s recovery was closely linked to improving conditions in traditional financial markets. According to Mei, investors increasingly believe the Iran conflict and rising oil prices could become less significant sources of market uncertainty.

Brent crude prices dropped more than 8% on Wednesday as investors anticipated that Democratic control of Congress could increase political pressure to bring the Middle East conflict to an end. Lower energy costs could help reduce inflationary pressures and operating expenses for businesses.

U.S. stock markets also moved higher, with the S&P 500 gaining 1.6%, while the dollar weakened.

However, trading across Asian markets remained uneven. Shares of Samsung Electronics and SK Hynix fell more than 6% on Thursday amid concerns about increased scrutiny of data centers and technology companies. In contrast, Chinese internet giants Tencent and Alibaba climbed more than 5% each.

Democratic Control Raises Questions Over U.S. Crypto Regulation

Despite the broader cryptocurrency recovery, Mei cautioned that the election outcome could complicate the regulatory outlook for digital assets in the United States.

He suggested that the proposed CLARITY Act could face difficulties advancing in its current form, while expectations for additional Federal Reserve rate cuts remain subdued.

The legislation is intended to clarify regulatory responsibilities and establish a more defined framework for the U.S. cryptocurrency industry. However, changes in congressional control could influence its prospects and the final provisions.

Zcash’s latest rally has also coincided with growing debate over the future of financial privacy under the incoming Congress.

A policy memorandum published on the Zcash forum Wednesday warned that lawmakers could intensify scrutiny of privacy-oriented financial services and their potential connection to illicit financial activities.

The memorandum stressed that financial privacy has legitimate applications beyond concealing illegal transactions. These include protecting consumer information, maintaining commercial confidentiality, and safeguarding individual civil liberties.

Zcash NU7 Upgrade Could Accelerate Transaction Confirmations

Zcash is also approaching its next major network upgrade, known as NU7, which is expected around Friday. One of the planned changes involves reducing the target block interval from 75 seconds to 25 seconds.

The shorter block interval could improve transaction processing efficiency, particularly for cryptocurrency exchanges handling deposits and withdrawals.

For instance, an exchange requiring three network confirmations could reduce its estimated waiting period from nearly four minutes to approximately 75 seconds, assuming its confirmation requirements remain unchanged.

Mei encouraged investors to monitor potential revisions to the CLARITY Act and watch for additional congressional investigations involving the cryptocurrency industry.

The incoming Democratic majorities are scheduled to take office on January 3. Their regulatory priorities could play a significant role in shaping the U.S. digital asset market, even as improving macroeconomic conditions continue to support the latest cryptocurrency rebound.