# Why Bitcoin Is Rallying After the Midterms By Mitchell Kochman · Scarcity & Scale Canonical: https://scarcityandscale.com/bitcoin-next-catalyst-ai-trade Publication date: 2026-11-04 Content update date: Not recorded Context: Written November 4, 2026. Views are my own; not investment advice. Bitcoin crossed $81,000 this morning as investors digested the midterm results. At the same time, Strategy’s STRC returned to par for the first time since May, reopening a source of funding for Bitcoin purchases without issuing more common stock. The moves came as data center stocks fell under the weight of a new political reality. Democrats who campaigned in part on limiting data center development won the governorships in Texas and Georgia, two states central to the AI buildout. Bitcoin has absorbed Binance and COLDCARD hacks, CLARITY failing to advance and ETF outflows without breaking its July 1 cycle low of around $57,850. Even the overnight drop to roughly $75,600 left that low well behind before the rebound above $81,000. Bad news has kept coming. The cycle low has held. There’s a bigger story developing here. The first phase of the AI trade sent investors toward the physical infrastructure needed to build it. Bitcoin could be a beneficiary as the market starts looking at what comes next. ## The infrastructure trade meets the ballot box For much of this cycle, the most obvious way to invest in AI has been to own the infrastructure. Chips, power, cooling and data centers. Intelligence was becoming abundant, and the physical capacity required to produce it was scarce. The midterms put another scarce resource into focus: permission. Data centers need electricity, water, land, permits and communities willing to host them. Voters are asking what happens to their electricity bills and water supply, who pays for the buildout and who benefits from it. When those concerns help candidates win elections, they can change how quickly projects get approved and what it costs to build them. AI still needs the physical world. Every useful agent depends on compute and electricity. The buildout will continue, but demand for intelligence can keep growing while the politics of supplying it become more difficult. Investors looking for exposure to AI have other places to put their money. ## Where Bitcoin fits Capital and attention poured into the physical bottlenecks needed to create AI. As the technology matures, investors may look for opportunities in the digital economy that infrastructure makes possible. Bitcoin belongs in that conversation. AI is going to make it possible for individuals and small teams to produce far more than they can today. Agents will work, transact and interact with financial systems. The cost of creating software, content and services will keep falling. As more things become abundant, scarcity becomes more valuable. Bitcoin doesn’t need to be the payment method for every agent to benefit. Stablecoins can move dollars, while Bitcoin can serve a different role as a scarce digital asset and collateral for an expanding digital economy. ## Why STRC returning to par matters Strategy has become a major source of Bitcoin demand by raising capital to buy and hold it. STRC is one of the instruments it can use to raise that capital. Its $100 par value is more than a round number. Strategy has said its policy is not to issue new STRC shares below par. With STRC back around that level, the company has a path to reopen a financing channel that has been constrained while the shares traded lower. Strategy was recently buying STRC back rather than issuing it. If demand holds and the company begins issuing shares again, it would give Strategy another source of capital to support its Bitcoin strategy. The issuance and how the company uses the proceeds will be important to watch. ## A potential opening in Washington The election may also change the path for digital asset legislation. President Trump has signaled a willingness to work with Democrats, raising the possibility that the CLARITY Act could find a bipartisan path forward after stalling in the Senate. Clearer rules could give institutions and companies more confidence to participate in the market. It would be another step toward Bitcoin and digital assets becoming a permanent part of the financial system. ## Scarcity in an age of abundance As the world gets better at producing intelligence, software and services, we still need a way to save the value we create. Bitcoin offers a fixed supply in a world where fiat money is created to finance growing obligations. The first phase of the AI trade was about building capacity. The next may be about finding what remains scarce when that capacity comes online. ## Sources 1. [Bitcoin crosses $81,000 — November 4 market report](https://finance.yahoo.com/markets/crypto/articles/bitcoin-tops-81-000-midterm-165626746.html) 2. [Reuters on the data center election results](https://www.investing.com/news/stock-market-news/analysistrumps-midterm-drubbing-demonstrates-the-power-of-datacentre-opponents-4998061) 3. [Strategy’s STRC policy](https://www.strategy.com/press/strategy-initiates-strc-repurchases-and-announces-ongoing-buyback-policy_07-27-2026) 4. [Jordi Visser on the rotation](https://visserlabs.substack.com/p/bitcoin-and-the-art-of-unlearning) 5. [The Price of Abundance](https://visserlabs.substack.com/p/the-price-of-abundance)