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The cryptocurrency market’s bullish momentum may slow after United States President-elect Donald Trump’s inauguration on Jan. 20, 2025, according to data on historical market performance during US election years.
In the US, stocks — and cryptocurrencies such as Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow" target="_self" text="null" title="https://cointelegraph.com/bitcoin-price">BTC</a>) — perform well in the weeks after a presidential election and then cool off once the President-elect takes office, according to data from Bloomberg and researcher Macrobond Financial.
This is especially pronounced when the incumbent president is a Republican, according to data from TS Lombard, a research group. The Republican party is typically seen as more business-friendly, sparking greater post-election market euphoria.
“[I]nvestors should tactically fade a postelection rally should the S&amp;P 500 exceed our 6100 year-end bull case target, which roughly aligns with a +5% index move from election day,” Scott Chronert, Citi’s US equity strategist, <a data-ct-non-breakable="null" href="https://www.msn.com/en-us/money/savingandinvesting/stocks-rally-looks-safe-for-now-it-could-stall-after-inauguration-day/ar-AA1tTt5V?ocid=finance-verthp-feeds&amp;apiversion=v2&amp;noservercache=1&amp;domshim=1&amp;renderwebcomponents=1&amp;wcseo=1&amp;batchservertelemetry=1&amp;noservertelemetry=1" rel="noopener noreferrer nofollow" target="_blank" text="null" title="https://www.msn.com/en-us/money/savingandinvesting/stocks-rally-looks-safe-for-now-it-could-stall-after-inauguration-day/ar-AA1tTt5V?ocid=finance-verthp-feeds&amp;apiversion=v2&amp;noservercache=1&amp;domshim=1&amp;renderwebcomponents=1&amp;wcseo=1&amp;batchservertelemetry=1&amp;noservertelemetry=1">reportedly</a> wrote in a November research note.
The data shows market performance rebounding after an initial post-inauguration correction.
<figure><img alt="Trump’s inauguration could mark local top for crypto, research shows" src="https://s3.cointelegraph.com/uploads/2024-12/0193891a-7f07-77ba-87ef-41636ec56026" title="">
 <figcaption style="text-align: center;">
 Source: <a data-ct-non-breakable="null" href="https://x.com/EricSoda/status/1855659605281366345" rel="noopener noreferrer nofollow" target="_blank" text="null" title="https://x.com/EricSoda/status/1855659605281366345">Eric Soda</a>
 </figcaption>
</figure>
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/investors-crypto-markets-peaking-h2-2025" rel="noopener noreferrer nofollow" target="_self" text="null" title="https://cointelegraph.com/news/investors-crypto-markets-peaking-h2-2025">Investors see crypto markets peaking in H2 2025: Survey</a>
<h3 id="post-election-rally">Post-election rally</h3>
As of Dec. 2, the S&amp;P 500 index stands at 6,047, a nearly 4.5% gain since Nov. 5, according to Google Finance.
Cryptocurrencies saw big gains after Trump’s election victory, as many say his win will benefit the industry,&nbsp;<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/the-influence-of-the-2024-us-elections-on-the-crypto-market-report" rel="noopener noreferrer nofollow" target="null" text="null" title="https://cointelegraph.com/news/the-influence-of-the-2024-us-elections-on-the-crypto-market-report">Cointelegraph Research said</a>.
Bitcoin’s price bump has been especially pronounced, with a more than 30% post-election gain for the world’s most popular cryptocurrency. Solana (<a data-ct-non-breakable="null" href="https://cointelegraph.com/solana-price-index" rel="noopener noreferrer nofollow" target="_self" text="null" title="https://cointelegraph.com/solana-price-index">SOL</a>) clocked similar gains.
Other analysts believe Bitcoin’s rally will continue post-inauguration, though there will be bumps along the way. According to Ryan Lee, the chief analyst at Bitget Research, the BTC price could correct as deep as 30% before resuming its bullish run.
“Historical data trends show that Bitcoin may still correct as much as 30% before it reaches its cyclical top,” the <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-30-correction-ahead-100k-btc-rally-analysts" rel="noopener noreferrer nofollow" target="_self" text="null" title="https://cointelegraph.com/news/bitcoin-30-correction-ahead-100k-btc-rally-analysts">analyst told Cointelegrap</a>h on Nov. 27.
Such a correction would hypothetically tank Bitcoin to around $70,000 per coin.
Investors expect the cryptocurrency bull run to continue into 2025 and peak in the second half of the year, MV Global, a Web3 investing firm, <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/investors-crypto-markets-peaking-h2-2025" rel="noopener noreferrer nofollow" target="_self" text="null" title="https://cointelegraph.com/news/investors-crypto-markets-peaking-h2-2025">told Cointelegraph</a>.
<figure><img alt="Trump’s inauguration could mark local top for crypto, research shows" src="https://s3.cointelegraph.com/uploads/2024-12/01938917-f88a-701d-b7e0-484239585562" title="">
 <figcaption style="text-align: center;">
 Source: <a data-ct-non-breakable="null" href="https://x.com/TS_Lombard/status/1853427981160534230" rel="noopener noreferrer nofollow" target="_blank" text="null" title="https://x.com/TS_Lombard/status/1853427981160534230">TS Lombard</a>
 </figcaption>
</figure>
<h3 id="weakening-correlations">Weakening correlations?</h3>
Historically, Bitcoin has been “considered a high-risk asset closely linked to US equities” —particularly Nasdaq, an index of US technology stocks — but that relationship has weakened in recent months, <a data-ct-non-breakable="null" href="https://www.binance.com/en/square/post/11-18-2024-bitcoin-s-correlation-with-u-s-equities-and-ether-hits-multi-year-lows-16403063301986" rel="noopener noreferrer nofollow" target="_blank" text="null" title="https://www.binance.com/en/square/post/11-18-2024-bitcoin-s-correlation-with-u-s-equities-and-ether-hits-multi-year-lows-16403063301986">according</a> to Binance Research.
“Since March 2024, the correlation between Bitcoin and the Nasdaq on a 30-day rolling basis dropped to 0.46, one of the lowest levels in five years,” Binance said.
Still, a nearly 50% correlation with US stocks means substantial exposure for BTC to any broader market downturn.
Ether’s (<a data-ct-non-breakable="null" href="https://cointelegraph.com/ethereum-https://cointelegraph.com/ethereum-priceprice" rel="noopener noreferrer nofollow" target="_self" text="null" title="https://cointelegraph.com/ethereum-https://cointelegraph.com/ethereum-priceprice">ETH</a>) correlation with the Nasdaq is even higher, at around 0.66, <a data-ct-non-breakable="null" href="https://www.macroaxis.com/invest/market/ETH.CC--compareProfile--NASDX" rel="noopener noreferrer nofollow" target="_blank" text="null" title="https://www.macroaxis.com/invest/market/ETH.CC--compareProfile--NASDX">according </a>to data from MacroAxis.com.
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/cz-hits-back-at-wsj-hong-kong-crypto-etfs-take-50b-equivalent-asia-express/" rel="noopener noreferrer nofollow" target="null" text="null" title="null">Binance hits back at WSJ, Hong Kong crypto ETF’s take ‘$50B equivalent’: Asia Express</a>

Trump’s inauguration could mark local top for crypto, research shows

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