Bitcoin Soars 50% Average, S&P 500 Gains 15% After Midterms

Historically, both Bitcoin and the S&P 500 have shown positive yearly returns after these midterms. The S&P 500, since 1950, has averaged a 15.17% increase in the year after midterms, which is more than double its average gain in other years.

However, the rally in BTC could also be attributed to the four-year halving cycles. Bitcoin's intrinsic code reduces the BTC given to miners by 50% every four years. Following each of the four halvings to date, BTC rallied sharply, peaked between 12 and 18 months later, before entering a bear market.

These bear markets have occurred in midterm years, specifically 2014, 2018, 2022, and now 2026. Therefore, the recent rebound after the midterms might represent the start of a new cycle rather than a political effect.

While analysts suggest buying and holding crypto now as a new bull run approaches, the historical data is too limited for absolute certainty. Bitcoin's recent trading near $80,000 might signal another upward move following the November 3 election.

Political shifts could intensify disputes over federal debt and defense spending if Democrats secure at least one chamber of Congress. Oversight letters have already been sent by Democratic lawmakers regarding the president’s crypto involvement.

Despite potential political friction, markets have largely factored in a divided government scenario following the election.

Why it matters

These historical trends suggest both crypto and traditional risk assets could see strong performance following the Nov. 3 midterms. Investors should watch if political uncertainty drives market volatility or if cyclical factors take precedence.