Why the Midterm Election Has Me Rethinking Crypto

This Tuesday, America votes.

And if you own bitcoin or any other crypto, I want you paying attention to what tends to happen after the votes are counted.

Bitcoin has repeatedly entered a volatile stretch after midterm elections.

My research team went back through the last three midterm elections: 2014, 2018 and 2022.

In the 30 days after those elections, bitcoin’s daily volatility averaged 4.24%. After presidential elections, it averaged just 2.55%.

Put another way, bitcoin was about two-thirds more volatile after midterm elections. 

I want to be clear about what that number means.

The election did not necessarily cause those swings. All three midterms also landed around a similar point in bitcoin’s four-year market cycle.

And each period had its own crypto-specific problems. 

After the 2014 election, bitcoin kept sliding into a January bear-market bottom around the time of the Bitstamp hack. In 2018, the Bitcoin Cash split hit the market. And in 2022, Election Day landed right as FTX was coming apart.

So I’m not telling you Tuesday’s election will make bitcoin rise or fall.

I’m telling you that we are moving into a stretch that has repeatedly produced much bigger swings in this market.

And that matters because of what bitcoin is doing right now.

The Calm Before the Vote