It is almost time for the 2022 midterm elections. Historically, global markets have taken a downturn prior to an election due to the uncertainty of the outcome. This year has been no different. Since the start of the new year, all three major indexes (NASDAQ, S&P500, and DOW Jones) have fallen more than 20% each from their highs. Although markets have been in a steady decline in recent months, there may be some light at the end of the tunnel. History has shown that in the months following an election, markets tend to recover nicely once all the smoke has settled. Since 1946, there have been 18 midterm elections. Despite having every possible political combination in the executive and legislative branches in the past 72 years, markets were higher in the months following every midterm election. On average, markets have risen 17% in the years following an election.
So what does this mean for crypto? For the first time in history, we are experiencing a crypto bear market simultaneously as a global recession. The state of the current macroeconomic environment has added some gasoline to an already-burning crypto bear market. But as history has shown, from the ashes, a Phoenix rises. As global markets begin to recover after the conclusion of this year’s midterm elections, we could potentially see bullish price action across all crypto markets, setting the pace for an explosive bull run leading up to the Bitcoin halving in 2024. It is important to be patient during times of economic uncertainty. If history has taught us anything, it is that wealth is transferred from the impatient to the patient. Be sure your portfolio is ready for whichever way the markets decide to move and HODL!!