Bitcoin (CRYPTO:BTC) has finished higher in the year following every U.S. midterm election since its launch. That is a small sample, sure, but the numbers are the numbers: Binance data show the cryptocurrency gained 24.5% after the 2014 midterms, 44.9% after 2018 and 92.3% after 2022.

Bitcoin ETFs See Strong Inflows

That historical trend is supported by recent activity in Bitcoin ETFs. As of Oct. 22, U.S. spot Bitcoin ETFs attracted more than $1.07 billion in net inflows over three trading sessions, reversing October's earlier outflow trend.

BlackRock and Fidelity led the rebound, with significant contributions from the iShares Bitcoin Trust (NASDAQ:IBIT) and Fidelity Wise Origin Bitcoin Fund (BATS:FBTC). This surge contrasts with Ethereum ETFs, which lost approximately $1 billion during the same period.

Institutional Demand Underpins Bitcoin

Institutional interest also plays a crucial role in Bitcoin's performance. Spot Bitcoin ETFs recorded $347 million in net inflows on Sept. 23, lifting weekly inflows to $2.06 billion.

Crypto analyst Scott Melker noted that broadening institutional demand was behind Bitcoin's rebound, suggesting a solid foundation for future growth.

Midterm Elections and Bitcoin's Prospects

As the U.S. midterm elections approach, Bitcoin's potential for a rally is under scrutiny. Market commentators noted Monday that Bitcoin has historically gained in the 12 months following midterm elections. Bulls argue the bottom is in, while bears target $73,000 as a potential downside.

Further supporting a potential rally, an Oct. 12 analysis highlighted improving on-chain demand and whale accumulation. Exchange reserves remain low, limiting immediate selling pressure and supporting a pre-election rally despite macroeconomic risks.