Bitcoin Historically Drops 56% in U.S. Midterm Years, Says Binance Research

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Ah, Bitcoin. Oil. Equities. Moving in perfect harmony like a well-rehearsed ballet, only with a bit more panic and geopolitical tension thrown in. And historical data, darling, suggests midterm years are a little less than kind to the market’s delicate sensibilities.

Bitcoin, much like your most unreliable friend at a dinner party, has been known to make rather sharp exits during U.S. midterm election years. Binance Research has kindly provided historical data, which shows the cryptocurrency’s tendency to plummet-an average of 56% during these political cycles. A delightful combination of geopolitical tensions and general macroeconomic uncertainty has only added to the party, leaving Bitcoin, oil, and equities dancing together in unison like a tragic three-act play.

Bitcoin Climbs to $71.8K Before Reversal as Iran Mine Deployment Raises Market Fears

As if things weren’t complicated enough, geopolitical tensions are doing their best impression of an overzealous opera singer-intensifying volatility across global markets. The U.S.-Israeli military campaign against you-know-who entered its second week after the dramatic launch of “Operation Epic Fury” on February 28.

Fast-forward to March 10, where things escalated even further. Iran’s Islamic Revolutionary Guard Corps-how very theatrical-reportedly decided to lay naval mines in the Strait of Hormuz. Because why not? They still have around 80-90% of their mine-laying capability. How very thoughtful of them!

Image Source: Binance

Shipping in the region, naturally, has come to a crashing halt. Binance Research, ever the diligent researcher, points out that traffic through the strait has fallen by more than 95%. A minor setback, really-though it might take weeks to clear the mines before shipping can return to its usual frenetic pace.

Meanwhile, energy markets had their own dramatic arc. West Texas Intermediate crude swung from $119 to $81 before making a comeback to $87 in a mere seven days. Intraday volatility? A mere $38 on March 10 alone, darling. These things are just full of surprises!

And, of course, Bitcoin, always the obedient follower, danced right along with oil and the latest geopolitical drama. It rallied with the grace of a diva when President Donald Trump hinted that the conflict might soon wrap up. Oil dropped nearly 30%, while Bitcoin pirouetted up to $71,800. Alas, sentiment reversed as reports confirmed the deployment of those pesky mines, and casualties began to rise.

Crypto Markets Face Heightened Volatility as Negative Gamma Signals Risk

The S&P 500 had its moment in the spotlight, rising 1.5% before taking a slight bow to end lower. Derivatives positioning, of course, added its own flair to the performance, amplifying market swings. Truly, the volatility we deserve.

Image Source: Binance

Now, let’s take a quick look at the market’s mood:

  • Bitcoin, oil, and U.S. equities are now moving like synchronized swimmers-closely aligned in macro patterns.
  • Market makers in BTC and equity options have shifted into negative gamma positioning, because why not add a little more drama to the show?
  • Negative gamma conditions, of course, amplify price reactions to external shocks-because nothing says “market excitement” like a good shock.
  • Goldman Sachs estimates that CTAs could sell $35-87 billion in equities in a matter of days. Truly a whirlwind!

The VIX index, ever the actor, dropped from 35 to about 23-a dramatic 50% decline. History suggests markets often perform well after such drops, but of course, major macro risks remain unresolved. It’s a tale as old as time.

Meanwhile, policymakers, ever the pragmatists, are discussing possible responses to the supply shock. G7 members and the International Energy Agency have considered releasing 180-400 million barrels from strategic petroleum reserves. But as any seasoned actor knows, logistical constraints make such performances less than effective.

Past emergency releases suggest that daily delivery capacity is closer to one million barrels. If they want to release 180 million barrels, it could take 4 to 5 months. A slow burn, indeed.

And let’s not forget transportation constraints. Oil shipments still have to pass through the Strait of Hormuz, where mines and high war-risk insurance are proving to be quite the deterrents.

Binance Research, ever the storyteller, estimates that the potential supply gap could reach 12-16 million barrels per day. Strategic reserves, alas, can only cover a fraction of the disruption.

Oh, and don’t forget the upcoming macroeconomic data. U.S. consumer price index figures and the Federal Reserve’s preferred PCE inflation gauge are due soon. Higher oil prices, somehow, haven’t made their presence known in inflation readings yet. Curious, isn’t it?

Bitcoin Historically Slides in Midterm Election Years but Rebounds Strongly Afterward

As if the world didn’t have enough drama, supply disruptions affecting Iranian fertilizer exports could tighten agricultural markets. You know what they say, fertilizer costs often lead food inflation by about six months. How charming!

Political cycles, of course, are a major influence on market behavior. Midterm election years, ever the divas, tend to produce weaker performances across risk assets. Historically, we’ve seen:

  • Average S&P 500 peak-to-trough drawdown of 16% during midterm years. It’s a rollercoaster!
  • Seven of the last ten midterm cycles recorded corrections above 10%. Oh, how those corrections love a good midterm!
  • Bitcoin has averaged a 56% decline in midterm election years since 2014. Truly, a dramatic turn of events.
  • Crypto price movements during these periods closely tracked equity markets. How very predictable.

Image Source: Binance

Election uncertainty, of course, weighs heavily on investor sentiment-much like a lead balloon. Once the results are in, however, markets often rebound in an act of sheer determination.

Data going back to 1939 reveals that the S&P 500 has averaged a 19% gain in the year after midterm elections. Bitcoin has also rallied in every recorded post-midterm cycle, with average gains of nearly 54%. Oh, the sweet taste of redemption!

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2026-03-12 21:32