Midterm Mystery: Halving Cycle Trumps Election Impact on Bitcoin

Bitcoin's performance before and after US midterm elections is often scrutinized by investors. A recent study examined Bitcoin's history leading up to midterms in 2014, 2018, and 2022.

The data reveals that each time, Bitcoin declined significantly during the August-September period preceding the election, with prices falling by 53% in 2014, 24% in 2018, and 21% in 2022. The fourth quarter also saw negative returns in all three years: -16.7% in 2014, -42.2% in 2018, and -14.8% in 2022.

However, the study's authors argue that these declines are not directly related to the election itself but rather a consequence of the halving cycle. The Bitcoin halving occurs every four years, which aligns with the midterm election schedule. This coincidence leads to a pattern where each bear market bottom falls within a midterm year.

Applying this analysis to 2026, the study predicts that Bitcoin's floor will form in mid-to-late 2026, rather than immediately after the November election. This is supported by Bitcoin's current quarterly returns, which show losses of 22.2% in Q1 and 14.1% in Q2, followed by a gain of 9.3% in Q3.