Bitcoin Shows Gains After Midterm Elections but Sample Is Limited

Bitcoin (BTC) has shown positive performance in the 12 months following the three U.S. midterm elections observed since 2014. After the 2014 election, BTC gained 24.5%, while it rose 44.9% after the 2018 election and a significant 92.3% after the 2022 election. However, the small sample size of just three observations makes it difficult to establish a reliable pattern.

The gains were not consistent. For example, Bitcoin fell 45.5% in the first month after the 2018 election, highlighting the volatility inherent in the cryptocurrency market. Despite these fluctuations, the overall trend in the subsequent 12 months remained upward.

Comparatively, the S&P 500 has advanced in all 19 observed 12-month periods after U.S. midterm elections since 1950, with an average gain of 15.4%. This historical data suggests that the third year of a U.S. presidential term tends to be the strongest-performing year for the stock market.