The Election Anomaly in Bitcoin Returns

Abstract

This study discovers a statistically and economically significant anomaly in Bitcoin performance-returns are, on average, 2.2% higher on major election days in G20 democracies on an exhaustive 2010-2024 sample that includes a full Bitcoin price history and 60 election events. This price appreciation is shown to be permanent, independent of the election outcome, and it is not accompanied by any significant prior or subsequent abnormal returns. The effect cannot be explained by conventional calendar anomalies or the Bitcoin halving cycle, and it is robust to alternative specifications and weighting schemes. The documented anomaly highlights the importance of cryptocurrencies in hedging political risks and presents a profitable trading opportunity for investors.