"Large-scale liquidity is coming" Bitcoin 2026 rebound theory…midterm election variable is a burden

A forecast said that if large-scale liquidity is supplied to the market due to easing U.S. monetary policy, Bitcoin prices could rise in 2026. However, some market participants point to the 2026 U.S. midterm elections and changes in the macro environment as major risks and remain cautious.

According to Cointelegraph on the 31st (local time), Abra's CEO Bill Barhydt said in an interview with the Schwab Network that "the U.S. Federal Reserve (Fed) may supply a substantial amount of liquidity to the market in 2026."

He said, "We are already seeing an early phase of accommodative quantitative easing (QE), and the Fed has begun repurchasing government bonds," and added, "If demand for government debt decreases along with rate cuts, a positive environment could be created for risk assets overall." He added, "This is a favorable condition for all assets, including Bitcoin."

Barhydt also evaluated clearer regulation of virtual assets in the U.S. and increased inflows from institutional investors as medium- to long-term bullish factors. He assessed, "If rate cuts and improvements in the institutional environment coincide, the virtual asset market could continue a positive trend for several years."

However, in the short term, market expectations for the pace of the monetary policy shift are declining. According to the Chicago Mercantile Exchange (CME) Group, the probability that rate cuts will be implemented at the January Federal Open Market Committee (FOMC) meeting was calculated at 14.9%. This is down from 23% in the November survey.

On the other hand, there are many who view 2026 as a bearish phase. Michael Terpin, known as an early Bitcoin investor, forecasted, "It is not possible to rule out the possibility that Bitcoin could form a bottom around 60000 dollars in the fourth quarter of 2026."

Terpin pointed to political variables as the main risk factor despite expectations of monetary easing. He said, "If the Republican Party does not achieve a sweeping victory in the 2026 midterm elections, the regulatory-friendly stance could weaken," adding, "This could act as a burden on the virtual asset market."

According to prediction market Polymarket, the probability that the Republican Party will control both the House and the Senate is about 19%. In contrast, scenarios in which the two parties split control of the House and the Senate have probabilities of 47% each.

The market views the flow of Bitcoin in 2026 as a process of finding a balance between expectations of monetary policy easing and political and regulatory variables. If liquidity expansion materializes, there is room for a rebound, but analysts say volatility could increase depending on the midterm election results.