Bitcoin: the last 3 midterms marked the low point of the cycle

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The calculation was published on October 28 using historical TradingView prices. It measures the performance of bitcoin between the day of the vote and the same date one year later: +24.1% after 2014, +44.9% after 2018, +92.1% after 2022. The average is 53.7%.

The 2010 election was ruled out. Bitcoin was then worth a few cents, and its 1,579% increase the following year would have crushed the entire series.

U.S. stocks follow the same schedule. According to Hartford Funds, the S&P 500 rose in the year following each of the 19 midterm elections since 1950, by 15.17% on average.

Let's say you buy bitcoin on November 6, 2018, the night of the vote, at $6,449. On December 15, it was trading around $3,200, and your position lost half its value in 6 weeks.

One year after the election, bitcoin is trading at $9,344. The statistic retains +44.9%. It ignores the weeks where your position was down 50%.

This December 15, 2018 also marks the low point of the cycle. Bitcoin has never fallen below this level since.

The same pattern is repeated in the other 2 elections. In 2014, bitcoin was worth around $330 on election day, then fell below $170 in mid-January 2015, 10 weeks later. In 2022, it will reach around $15,800 2 weeks after the vote, swept away by the bankruptcy of FTX.

In all 3 cases, this low is the low point of the cycle. The +53.7% therefore first measure the rebound from the low point, reached just after the vote.

The mid-term elections come back every 4 years, just like the halving. Every 210,000 blocks, or approximately every 4 years, the reward for miners is divided by 2, and the issuance of new bitcoins with it.

The bitcoin cycle has so far stuck to this rhythm: a peak 12 to 18 months after the halving, then around 1 year of decline. This pace places the low point of the cycle in the midterm year.

Each post-midterm window then covers the rise which precedes the following halving. The next one will close in November 2027, around 5 months before the halving expected in spring 2028.

The author of the calculation himself recognizes this: the sample is too short to isolate an electoral effect. We have 3 observations and 2 clocks which beat at the same rhythm, without any statistical means of telling which one is causing the price to rise.

Machine-translated from French