(Corrects paragraph 4 to $2.61 trillion from billion)

By Amanda Cooper and Jiaxing Li

LONDON/HONG KONG, Nov 4 : Cryptocurrencies briefly dipped on Wednesday as Democrats won majorities in both the Senate and House in the US midterm elections, a potential blow to an industry that has pushed for faster deregulation for digital assets.

The sector has spent more than $300 million backing crypto-friendly Democrats and Republicans in roughly equal measure during the current and previous election cycles, hoping to pass legislation US crypto companies say will put them on a solid legal footing and allow them to thrive.

Bitcoin briefly touched a six-week low before recovering to trade roughly flat by 0715 GMT at $78,070. Ether traded at $2,292,…