Looking back at the U.S. election years, the results announced in November and December often lead to a high probability of gains in both the U.S. stock market and Bitcoin. Is this also a good opportunity for investors to position themselves?
(Preface:
Key timelines of the U.S. elections, economic policies of both parties, and subsequent market impacts at a glance.)
(Background:
Will Bitcoin reach new highs after the U.S. elections? How to maximize profits in a highly volatile market.)
Table of Contents:
– S&P 500 Index
– Bitcoin
– Bitcoin’s Market Share Hits a Near Two-Year High
The highly anticipated U.S. presidential election is set to begin its official count on November 6, Taiwan time. However, the different economic and military policies that may be introduced by the Republican and Democratic parties have global investors on edge, speculating on the impact this U.S. election may have on stocks, Bitcoin, and other assets.
Against this backdrop, this article compiles the performance of the S&P 500 Index and Bitcoin following the announcement of past U.S. election results, providing investors with reference data.
S&P 500 Index
As one of the four major U.S. stock indices, the S&P 500 Index has been tracking the performance of the U.S. stock market since 1957, covering about 80% of the total market capitalization of U.S. listed companies. Statistics show that in the November and December of the year when the past ten U.S. presidential election results were announced, the performance of the S&P 500 Index was as follows:
– 1984: November up 3.5%, December up 2%
– 1988: November up 2%, December up 1.5%
– 1992: November up 1%, December up 1.2%
– 1996: November up 2.5%, December up 1.8%
– 2000: November down 8%, December up 0.4%
– 2004: November up 3.5%, December up 3.2%
– 2008: November down 7.5%, December up 1%
– 2012: November up 0.3%, December up 0.7%
– 2016: November up 3.4%, December up 1.8%
– 2020: November up 10.8%, December up 3.7%
It can be seen that the S&P 500 Index has only experienced declines in November 2000 and 2008 after the past ten U.S. presidential election results, with an 80% probability of rising in November; in December, the S&P 500 Index has a 100% probability of rising during election years.
The declines in 2000 and 2008 were due to specific economic events leading to abnormal fluctuations, as the dot-com bubble and the global financial crisis occurred in those years, respectively. Although the U.S. has repeatedly stated that it will achieve a soft landing, whether it can smoothly overcome the long term remains an unknown.
Bitcoin
According to Coinank data, Bitcoin’s performance in November and December of the two election years in the past decade was as follows:
– 2020: November up 42.95%, December up 46.92%
– 2016: November up 5.42%, December up 30.8%
It is evident that Bitcoin has seen a 100% probability of rising in November and December following the announcement of the last two election results, almost marking the highest monthly gains of the year.
Combining the above data, it is evident that both Bitcoin and the U.S. stock market tend to rise following the U.S. election results. However, it is worth noting that history does not simply repeat itself, and investors should remain cautious and not overly rely on historical data for leveraging.
Bitcoin’s Market Share Hits a Near Two-Year High
Worth mentioning is that according to TradingView data, Bitcoin’s market share (BTC.D) has currently reached 60%, marking a new high since 2021.
Looking back at history, when Bitcoin’s market share exceeds 50%, it signifies a stronger dominant position in the overall cryptocurrency market, possibly indicating the early stages of a bull market or an increase in market risk-aversion sentiment. Conversely, when Bitcoin’s market share gradually decreases from a high position and the price experiences a correction, it might indicate capital outflow from Bitcoin, leading to a surge in altcoins.
Bitcoin’s Market Share
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