Bitcoin (BTC-USD) tumbled below $77,000 on Thursday as investors moved out of riskier assets amid a broad sell-off in US stocks that threatened to erase the previous day's post-election rally.

The world's largest cryptocurrency fell 6% Thursday, reversing a sharp rebound Wednesday that had lifted bitcoin above $80,000 as investors cheered midterm election results showing Democrats swept both chambers of Congress.

The move dragged crypto-related stocks lower, following major indexes shedding their Wednesday gains.

Shares of Coinbase Global (COIN), Robinhood (HOOD), Strategy (MSTR) and Bullish (BLSH) fell 9% or more. Meanwhile, the global market value for crypto assets fell 5%, erasing $370 billion over the same period, according to Coinmarketcap data.

Bitcoin's latest slide follows a warning from digital asset research firm K33 earlier this week that unusually thin trading activity and rising use of leverage set up bitcoin for sharp price swings following midterm results.

Bitcoin's retreat also underscored of the crypto market's lingering fragility following $6.3 billion hack of Binance, the world's largest cryptocurrency exchange, which rattled crypto prices last week.

The Democratic takeover of Congress also has raised fresh questions about the crypto industry's prospects in Washington, including passage of the industry's long-stalled bill, the Clarity Act.

Brian Gardner, Stifel's chief Washington policy strategist, said in a briefing with reporters on Thursday that the Clarity Act is unlikely to advance before the end of the year.

"It's off the table for the lame duck session," Gardner said, adding that the odds of a bipartisan compromise in the next Congress are "pretty low."

Gardner added that he expects Senator Elizabeth Warren, who is poised to chair the Senate Banking Committee, to pursue investigations targeting crypto firms along with Wall Street banks and private equity firms.

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