The highly anticipated U.S. presidential election will officially begin vote counting on November 6th, Taiwan time. However, as the Republican and Democratic parties may bring different economic and military policies, the election results will also affect the mood of global investors. People are guessing what impact this U.S. election will have on assets such as stocks and Bitcoin.
Against this background, this article will summarize the performance of the S&P 500 Index and Bitcoin after the results of past U.S. presidential elections, in order to provide some reference data for investors.
S&P 500 Index
As one of the four major U.S. stock indices, the S&P 500 Index has been recording the performance of the U.S. stock market since 1957, covering about 80% of the total market capitalization of U.S. listed companies. According to statistics, the performance of the S&P 500 Index in November and December of the year when the results of the past ten U.S. presidential elections were announced is as follows:
- 1984: Up 3.5% in November, up 2% in December
- 1988: Up 2% in November, up 1.5% in December
- 1992: Up 1% in November, up 1.2% in December
- 1996: Up 2.5% in November, up 1.8% in December
- 2000: Down 8% in November, up 0.4% in December
- 2004: Up 3.5% in November, up 3.2% in December
- 2008: Down 7.5% in November, up 1% in December
- 2012: Up 0.3% in November, up 0.7% in December
- 2016: Up 3.4% in November, up 1.8% in December
- 2020: Up 10.8% in November, up 3.7% in December
It can be seen that the S&P 500 Index has only experienced declines in November in 2000 and 2008 after the results of the past 10 U.S. presidential elections were announced, with an 80% probability of rising in November; while in December, the S&P 500 Index has a 100% probability of rising in the election year.
As for the declines in 2000 and 2008, they were due to abnormal fluctuations caused by specific economic events, as the Internet bubble burst in 2000 and the global financial crisis occurred in 2008. Although the U.S. has repeatedly stated that it will achieve a soft landing this time, whether it can smoothly navigate the long-term remains unknown.
Bitcoin
According to data from Coinank, Bitcoin's performance in November and December of the two election years in the past decade was:
- 2020: Up 42.95% in November, up 46.92% in December
- 2016: Up 5.42% in November, up 30.8% in December
It can be seen that Bitcoin has a 100% probability of rising in November and December of the year when the election results were announced in the last two elections, and it can almost be said to be the month with the highest year-on-year increase.
Based on the above data, it can be seen that Bitcoin and U.S. stocks often rise with the announcement of U.S. election results in election years; however, it is worth noting that history will not simply repeat itself, and investors should still remain cautious at the moment and should not rely too heavily on historical data to increase leverage operations.
Bitcoin market share reaches new high in nearly two years
It is worth mentioning that according to data from TradingView, Bitcoin's market dominance (BTC.D) has now reached 60%, setting a new high since 2021.
Looking back at history, when Bitcoin's market dominance is above 50%, it means that Bitcoin's dominant position in the overall cryptocurrency market is stronger, which may be a signal of the early stage of a bull market or an increase in market risk aversion; while when Bitcoin's market dominance gradually declines from a high level and the price undergoes a correction, it may mean that funds are flowing out of Bitcoin, triggering an Altcoin explosion.
