As the U.S. presidential election looms closer, it is important to analyze how past elections have impacted the price of Bitcoin. Looking back at historical trends in the U.S. stock market can provide valuable insights, especially considering Bitcoin’s correlation with equities, particularly the S&P 500 index.
The correlation between Bitcoin and the S&P 500 has been significant, especially during Bitcoin’s bull markets and periods of positive sentiment in traditional markets. While there has been speculation about Bitcoin decoupling from equities as it matures, there is no concrete evidence to support this claim yet.
When it comes to post-election performance, the S&P 500 has historically shown positive reactions following U.S. presidential elections. Over the past few decades, the stock market has often experienced substantial gains in the year following an election. Looking at the S&P 500 vs Bitcoin Year-on-Year Change chart, we can observe the price action of both assets in the months following election periods.
For instance, after the 2012 election, the S&P 500 saw an 11% year-on-year growth, which surged to 32% a year later. Similarly, in 2016, the S&P 500’s 7% year-on-year growth increased to around 22% post-election. In 2020, the S&P 500’s growth of 17-18% in November 2020 climbed to nearly 29% the following year.
This trend of post-election outperformance is not a recent phenomenon. Looking at data from the past four decades or ten elections, only one year had negative returns twelve months after election day (2000, during the dot-com bubble burst). Regardless of the winning party, positive market trends following elections have been consistent, driven by the resolution of uncertainty and increased investor confidence.
As we look ahead to the 2024 U.S. presidential election, there is speculation about how Bitcoin will perform based on historical trends. If past patterns hold, significant price increases could be expected. For example, if Bitcoin experiences similar percentage gains in the year following the election as seen in previous years, prices could potentially reach $1,000,000, $500,000, or $250,000, depending on the election cycle.
It is worth noting that returns have decreased by approximately 50% with each election cycle, suggesting a realistic target of $125,000 for November 2025. This aligns with historical data and the middle bands of the Rainbow Price Chart. Additionally, each cycle has seen Bitcoin surpass its previous peak gains, indicating the potential for even higher prices in the future.
In conclusion, the data indicates that the period following a U.S. presidential election tends to be bullish for both the stock market and Bitcoin. With less than two months until the next election, Bitcoin investors may have reasons to be optimistic about the future. For further insights on this topic, you can watch a recent YouTube video discussing whether the U.S. election will be bullish for Bitcoin.