As the world awaits the results of the U.S. presidential election, the cryptocurrency market is bracing for volatility. However, once the political dust has settled, historical patterns suggest that bitcoin (BTC), the world’s largest cryptocurrency, is poised for a significant rally.
Since its inception in 2009, bitcoin has witnessed three U.S. elections, each followed by a significant price rally. The price of bitcoin has never fallen below its price on election day in these cycles, suggesting a strong upward trend post-election. If the pattern holds, BTC price should peak around a year after the election, potentially topping $100,000.
The potential of the U.S. election to act as a bullish catalyst for bitcoin is evident when examining the previous cycles. In the 2012 election, bitcoin was trading around $11. A year later, in November 2013, it had soared by nearly 12,000%, reaching over $1,100.
Fast-forward to 2016, the price of bitcoin was approximately $700 in the first week of November. It peaked at around $18,000 in December 2017, marking an increase of about 3,600%.
The most recent cycle followed the November 2020 election, which coincided with the Covid-19 pandemic. Bitcoin rallied a staggering 478% to a market peak of around $69,000 a year later, hitting a record high of over $73,000 in March 2024.
Though the price of bitcoin has been higher after each election, the size of the subsequent rally has shown diminishing returns. The percentage decrease between the first and second cycle was 70%, and between the second and third, it was 87%. If this trend continues, we can expect a decrease of around 90%, implying a post-election rally of approximately 47.8%. This suggests that bitcoin might reach about $103,500 in the fourth quarter of 2025.
However, it’s important to note that bitcoin currently appears undervalued compared with previous cycles, whether measured from the cycle low, which occurred during the FTX collapse in November 2022, or since the most recent mining-reward halving in April.
This cycle has been the worst-performing since the halving, with bitcoin only 7% higher than when the 50% reduction took effect. This aligns with the diminishing returns theory, suggesting that while the price of bitcoin is likely to rise post-election, the surge may not be as dramatic as in previous cycles. Nonetheless, the potential for significant growth remains, underscoring the enduring allure of this pioneering cryptocurrency.
