US Midterms Are Here: History Points to a Stock Rally but Trouble for Bitcoin

The 2026 US midterm elections could become an important catalyst for both equities and crypto markets, particularly if President Donald Trump loses control of both the House and Senate. Prediction markets currently put the probability of a Democratic sweep at roughly 76%, with Democrats priced at around 94%-95% to win the House and approximately 76% to take the Senate.

Stock Market Rally

A widely circulating analysis highlights that there have been seven occasions since 1954 when a president lost both chambers of Congress during the midterms. In six of those seven cases, the S&P 500 rose by an average of 2.1% in the following month alone. The increases jump to 10.7% in the next three months, rising to 17.5% after six months, and 15.5% after one year.

In all seven cases, the benchmark index was higher three, six, and 12 months after the election. The possible explanation for this historical pattern is that once the election removes political uncertainty, investors can price the new balance of power more clearly.

Bitcoin Decline

Bitcoin has historically struggled after midterm elections. After the 2014 vote, BTC eventually fell by over 45% within 71 days before reaching its bear-market low. In 2018, the nosedive was even more severe at almost 50% in 39 days. The 2022 election was followed by another double-digit decline, around 25% according to Ted Pillows, in just weeks.

Dealer.eth highlighted an interesting longer-term pattern: those post-election lows ultimately became the bear-market bottoms of their respective cycles. A year after the aforementioned midterms, BTC was approximately 24%, 45%, and 92% higher, respectively. Independent historical price data puts the average 12-month gain across those three periods at roughly 54%.