US Midterms may Fuel Crypto, Stock Market Recovery: Binance Research

Update March 12, 1:21 pm UTC: This article has been updated to include comments from Gracy Chen, CEO of crypto exchange Bitget.

The US midterm elections may be the next catalyst to kickstart the crypto and stock market recovery, according to historical data shared by Binance Research.

According to a Wednesday report from Binance Research, US midterm election cycles have historically been followed by strong rebounds in stocks and Bitcoin (BTC), potentially setting up a recovery window for risk assets after the 2026 vote.

The 12 months following US midterm elections have resulted in an average 19% rise in the S&P 500 and 54% rise for Bitcoin in the three post-midterm years on record.

Binance Research said the year following the US midterms may prove the “strongest window in the cycle,” arguing that markets have historically rallied after election outcomes remove a major source of political uncertainty.

“Once election outcomes are determined and uncertainty is resolved, markets have historically staged powerful rallies.”

Bitcoin logged negative returns during previous midterm years, including a 56% drawdown in 2014, 73% decline in 2018 and a 64% retracement in 2022, but historic patterns showed a rebound in the following years.

The report comes nearly eight months before the Nov. 3 US midterm elections, which will determine the makeup of the 120th Congress.

Binance said near-term market direction is more likely to be driven by the conflict involving the US, Israel and Iran, warning that further escalation could push oil prices higher and keep risk assets under pressure.

Related: Can US lawmakers pass crypto market structure before the midterms?

Oil spike adds to market stress

Crude oil price briefly surged to $95 per barrel on Thursday as the conflict entered its 13th day, according to data from Trading Economics.

The price surge followed reports of Iran stepping up its attacks against energy infrastructure, as two fuel tankers were scorched by explosive-laden Iranian boats, Reuters reported earlier on Thursday.

A spokesperson for Iran’s military command told the news outlet that the world should prepare for oil prices of $200 per barrel due to the instability caused by the US.

The jump came a day after the International Energy Agency said member countries would carry out a 400 million-barrel emergency stock release, the largest coordinated drawdown on record.

Gracy Chen, CEO of crypto exchange Bitget, said the crypto market’s recovery hinges on a resolution to the conflict, as continued oil supply disruptions may “position oil to outperform gold as a hedge.” 

“In this environment, crypto’s higher-beta profile means its upside potential could still exceed traditional equities should liquidity conditions stabilize once political uncertainty clears,” she told Cointelegraph.

Related: US Senate bill targets prediction markets on war and assassinations

Global markets in “wait-and-see” phase amid geopolitical escalations

The ongoing developments in the Middle East remain the key driver for global risk sentiment, as uncertainty surrounding energy supply and military escalations left markets in a “wait-and-see phase where policy and geopolitical risks intersect,” analysts at crypto derivatives exchange Bitunix told Cointelegraph:

“Currently, BTC is fluctuating repeatedly below the $70,000 level, indicating that market activity remains dominated by liquidity sweeps both above and below.”

The market structure suggests that Bitcoin will remain bound to this range until “macro events provide clearer directional signals,” the analysts said.

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