U.S. Midterms Could Set the Stage for a Bitcoin and S&P 500 Rally

Bitcoin and the S&P 500 have historically gained ground in the 12 months following U.S. midterm elections, suggesting both markets could see further upside after the November 3 vote. However, Bitcoin’s past performance may have more to do with its four-year halving cycle than with political events.

Since Bitcoin’s launch in 2009, the cryptocurrency has experienced four U.S. midterm election cycles. Excluding 2010, when the digital asset market was still relatively small, Bitcoin recorded an average gain of 53.7% in the year after the remaining three elections, according to CoinDesk’s analysis.

The returns are calculated by comparing Bitcoin’s daily closing price at 00:00 UTC on Election Day with its closing price on the same calendar date one year later.

Bitcoin climbed 1,579% during the year following the 2010 midterms. However, the cryptocurrency market was still in its infancy, making that exceptional return a poor benchmark for assessing current market conditions.

If historical trends persist, Bitcoin’s recent consolidation near $80,000 could precede another rally after the upcoming elections. BTC has already recovered more than 35% since falling below $60,000 in June. Some analysts believe the market may be approaching another bullish phase, encouraging investors to consider accumulating Bitcoin for the longer term.

Bitcoin’s halving cycle could explain previous rallies

Although Bitcoin has historically advanced after midterm elections, the limited number of examples makes it difficult to establish a direct link between voting outcomes and cryptocurrency prices. Its recurring four-year market cycle may offer a more convincing explanation.

Bitcoin’s cycle is closely connected to its mining reward halving, a feature built into the network that reduces the amount of new BTC awarded to miners per block by 50% approximately every four years.

Following each of the four completed halvings, Bitcoin has experienced a substantial rally, reached a peak roughly 12 to 18 months later and subsequently entered a bear market.

These downturns occurred during U.S. midterm election years in 2014, 2018 and 2022, as well as 2026. This overlap suggests that earlier post-election rallies may have marked the beginning of fresh Bitcoin market cycles rather than reflected a direct response to political changes.

Historical S&P 500 returns strengthen the outlook

The S&P 500 has a much longer track record, and its historical performance also indicates that the year after midterm elections has typically been favorable for equities.

Hartford Funds data shows that the index has generated an average return of 15.17% during the 12 months following midterm elections since 1950. In other years, its average gain was 7.30%.

The difference suggests that U.S. stocks have tended to perform more strongly after midterm elections. A positive trend in equities could also benefit Bitcoin and other risk-sensitive investments, although cryptocurrency prices do not necessarily follow the stock market.

What the 2026 midterms could mean for investors

The November 2026 elections could influence President Donald Trump’s ability to pursue his policy agenda during the final two years of his current term.

If Democrats take control of one or both chambers of Congress, disagreements over the growing federal debt could intensify. The unresolved debt-limit issue could complicate negotiations, while Trump’s proposed $350 billion in mandatory defense funding may face significant opposition, according to Brookings.

Democrats could also use congressional oversight and legislative measures to challenge funding for further military escalation in the Middle East.

Cryptocurrency policy could become another area of political conflict. Democratic committee chairs may investigate potential conflicts of interest involving Trump’s personal crypto profits and his family’s business activities. Lawmakers have already sent oversight letters examining the president’s cryptocurrency connections.

Trump’s memecoin, launched in January 2025, has also attracted criticism after retail investors suffered substantial losses.

Nevertheless, the Supreme Court’s decision in Trump v. Slaughter left much of the financial regulatory system under presidential control. This could limit Congress’s ability to prevent the administration from advancing its crypto-friendly agenda.

Markets have largely anticipated a divided federal government, with Democrats expected to regain control of at least one chamber of Congress.

Historical trends therefore provide a potentially bullish signal for Bitcoin and the S&P 500 following the midterms. Still, the next market move will depend on political developments, economic conditions and Bitcoin’s own market cycle, rather than election history alone.