New research from Binance suggests the upcoming 2026 United States midterm elections could set the stage for a recovery in both Bitcoin and equities, even 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 a consistent rebound after U.S. midterm election cycles. Historical data shows the S&P 500 has produced an average return of 19% in the 12 months following midterm elections, 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 post-midterm years on record, the cryptocurrency delivered an average gain of 54%, according to the report.
“Once election outcomes are determined and uncertainty is resolved, markets have historically staged powerful rallies,” the report stated.
The research arrives about eight months before voters head to the polls on Nov. 3 to determine the composition 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 around fiscal policy, regulation, and government spending.
Binance Research noted that midterm years have often brought meaningful drawdowns before the subsequent recovery. The S&P 500 has experienced an average peak-to-trough decline of about 16% during midterm election years, making it the weakest period in the presidential cycle.
Bitcoin has shown similar behavior in past cycles, though with greater volatility. The cryptocurrency posted sharp declines during the previous three midterm years on record, including a 56% drawdown in 2014, a 73% decline in 2018, and a 64% drop in 2022.
Despite those losses, each cycle was followed by a strong recovery once the election period passed, Binance wrote.
Bitcoin, oil, Iran, and macro events
Market participants say the historical pattern reflects the removal of political uncertainty once the balance of power in Washington becomes clear.
Fiscal policy expectations, regulatory agendas, and legislative priorities tend to stabilize after election outcomes are known, giving investors a clearer framework for positioning capital.
The report also touched on the ongoing conflict involving the United States, Israel, and Iran as a central source of macro risk.
Disruptions tied to the conflict have pushed oil prices higher and raised concerns about supply flows through the Strait of Hormuz, one of the most important shipping corridors for global energy markets.
The energy shock has added pressure to risk assets across global markets, including Bitcoin. Binance analysts say sustained supply disruptions could keep oil prices elevated and weigh on investor sentiment.
Bitcoin has traded near the $70,000 level in recent sessions, with market structure showing repeated liquidity sweeps above and below key price ranges. Derivatives analysts say that pattern suggests traders are waiting for clearer signals from macro events before taking directional positions.
Despite near-term uncertainty, Binance Research argues that the historical record around U.S. midterm cycles offers a longer-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 political uncertainty fades.
