As the 2024 U.S. presidential election nears, many in the crypto space are speculating about Bitcoin’s next move. While historical election trends have significantly impacted the U.S. stock market, could the same patterns apply to Bitcoin, especially given its strong historical correlation with equities, particularly the S&P 500? Let’s dive into the data.
S&P 500 and Bitcoin: A Strong Correlation
Historically, Bitcoin has shown a solid correlation with the S&P 500, especially during bull cycles. When traditional markets adopt a risk-on sentiment, Bitcoin tends to follow suit. While there’s ongoing discussion about Bitcoin “decoupling” from equities as it matures into a less speculative asset, no definitive proof exists yet.
Post-Election Stock Market Gains
The S&P 500 typically experiences strong gains in the year following a U.S. presidential election. Past elections show this trend clearly:
- 2012 Election: S&P 500 grew 11% year-on-year by November, skyrocketing to 32% within a year.
- 2016 Election: The S&P 500 posted a 7% YoY growth in November, surging to 22% a year later.
- 2020 Election: A similar pattern emerged, with 17-18% growth by November, climbing to nearly 29% the following year.
What Does This Mean for Bitcoin?
If Bitcoin were to follow similar post-election trends as seen in the past, we could witness significant price increases. Based on previous election cycles, here’s what Bitcoin could potentially achieve post-2024 election:
- 2012-Style Gains: BTC could skyrocket to $1,000,000.
- 2016-Style Gains: BTC could rise to around $500,000.
- 2020-Style Gains: A more conservative $250,000 target.
However, it’s worth noting that each cycle has seen diminished returns of about 50% compared to the previous one. This suggests that a more realistic target for Bitcoin post-election might be $125,000 by November 2025. Interestingly, this price aligns with Bitcoin’s middle band on the Rainbow Price Chart, signaling potential further upside beyond even these conservative estimates.
Conclusion: Optimism for Bitcoin Post-Election
Historically, U.S. presidential elections bring bullish momentum to both the stock market and Bitcoin. With less than two months to go until the 2024 election, Bitcoin investors might find reasons for optimism in the months ahead. Based on historical data, we could see significant price movement as uncertainty clears and investor confidence surges.
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