A new study from Binance suggests that the upcoming 2026 United States midterm elections could set the stage for a recovery in both Bitcoin and equities, as markets face pressure from geopolitical tensions and rising energy prices.
In a report released this week, Binance Research found that risk assets have shown consistent rebound after US midterm election cycles. Historical data shows that the S&P 500 produced an average return of 19% in the 12 months following a midterm election, with no negative annual return recorded since 1939.
Bitcoin has shown an even stronger pattern in the limited number of cycles since its emergence as a liquid asset. In the three years since the mid-term in the record, the cryptocurrency has delivered an average profit of 54%, according to the report.
“Once the election results are decided and the uncertainty is resolved, the markets have had a strong rally,” the report said.
The survey comes about eight months before voters go to the polls on November 3 to determine the makeup of the 120th Congress. Historically, midterm election years have produced some of the most volatile periods in the four-year presidential cycle as investors adjust expectations about fiscal policy, regulations, and government spending.
Binance Research noted that the inter-term years have generally brought meaningful declines before the next recovery. The S&P 500 has averaged a cruise peak of about 16% during midterm election years, making it the weakest time in a presidential cycle.
Bitcoin has shown similar behavior in previous cycles, although it is more volatile. The cryptocurrency has posted the biggest declines over the past three mid-terms on record, including a 56% drawdown in 2014, a 73% drop in 2018, and a 64% drop in 2022.
Despite those losses, each cycle was followed by a strong recovery when the election period passed, Binance wrote.
Bitcoin, oil, Iran, and major events
Market participants say the historical pattern shows the removal of political uncertainty when the balance of power in Washington becomes clear.
Monetary policy expectations, regulatory agendas, and legislative priorities tend to stabilize after election results are known, giving investors a clear framework for investing.
The report also referred to the ongoing conflict involving the United States, Israel, and Iran as the main source of serious risk.
The disruptions associated with the conflict have driven up oil prices and raised concerns about supply flows through the Strait of Hormuz, one of the most important shipping lanes in the world’s energy markets.
The energy shock has added pressure to commodity risk in global markets, including Bitcoin. Binance analysts say continued supply disruptions could keep oil prices higher and weigh on investor sentiment.
Bitcoin has traded close to the $70,000 level in recent times, with a market structure that shows repeated sweeps of liquidity above and below key price ranges. Derivatives analysts say the pattern suggests that traders wait for clear signals from major events before taking definitive positions.
Despite near-term uncertainty, Binance Research argues that the historical record surrounding US mid-cycles provides a long-term perspective for investors.
If the pattern holds, the months following the 2026 midterm elections could provide one of the strongest windows for risk assets in the political cycle, potentially setting up a new rally for both equities and Bitcoin once the political uncertainty is over.
