Bitcoin’s Midterm Election Effect Faces a Familiar Problem: It Overlaps With the Halving Cycle
A research note from IOSG Ventures argues that U.S. midterm elections have historically lined up with strong post-election performance in equities, but the pattern is less straightforward for Bitcoin and may be harder to isolate than headline numbers suggest. Since 1950, the S&P 500 has finished higher 12 months after every U.S. midterm election, with an average gain of 15.1% and a median gain of 14.5%. Yet the report says 2026 starts from a different place: stocks were already near record highs before the Nov. 3 vote, and the drawdown ahead of the election was shallower than in most past cycles. For Bitcoin, the sample is much smaller. In the three full midterm cycles that include BTC — 2014, 2018 and 2022 — the asset traded lower in the weeks after Election Day each time, but was higher one year later in all three cases. IOSG says that pattern should not be treated as proof of a clean election effect because each of those elections also fell roughly two to two and a half years after a Bitcoin halving, during bear-market phases. The report adds that policy matters for crypto, especially through congressional control, legislation and regulatory oversight, but says market direction will still depend more on earnings, rates, liquidity and capital flows.
