Binance Research has released its latest report, providing an in-depth analysis of Bitcoin's short-term price movements and suggesting that the US midterm elections could be a key catalyst for a Bitcoin price surge.
The report's data shows that the S&P 500 index has risen by an average of 19% in the 12 months following midterm elections. Since 1939, the index has never experienced negative returns during this period.
Although the data sample is smaller, Bitcoin has also shown a similar trend. Since around 2014, when liquidity in the cryptocurrency market increased, Bitcoin has performed strongly after the past three midterm election cycles. On average, the asset has risen by approximately 54% in the three years following the election.
Election cycles typically bring market volatility. The report points out that midterm election years are usually the most volatile period in the four-year political cycle. Investors often become cautious due to uncertainty about policy direction and economic priorities.
Historically, the S&P 500 index has fallen by an average of about 16% during midterm election years. In many cases, market corrections occur before the vote, when uncertainty is at its highest.
Bitcoin's movements tend to be similar, but with greater volatility. Binance Research states that in past midterm election years, BTC has fallen by an average of about 56%, reflecting the asset's higher sensitivity to changes in risk sentiment.
Once the election results are announced, the environment usually changes. Investors gain a clearer understanding of fiscal policy and regulation, and funds typically flow back into risk assets. This shift helps drive a strong rebound in the year following the midterm elections.
Macro risks continue to affect Bitcoin's price. While the election cycle provides a longer-term perspective, the report notes that global events are currently driving the market.
In recent days, the oil market has been highly volatile, and Bitcoin has fluctuated along with macro assets. Binance Research says that the price movements of BTC, crude oil, and US stocks follow similar patterns, although cryptocurrencies typically exhibit greater volatility.
Meanwhile, activity among US investors appears to be increasing. Trading related to Bitcoin spot ETFs has increased in the past week, indicating renewed interest from traditional market participants.
Even so, ETF trading volume still accounts for a relatively small portion of total Bitcoin spot trading volume. This gap suggests that there may still be significant room for institutional participation over time.