A direct comparison of Bitcoin and the US stock market returns over five years yields an unexpected result: with a lump-sum purchase, the first cryptocurrency underperforms the index, but with systematic investing, the picture reverses. An analysis of these scenarios reveals the key role of discipline and averaging in risk management.
Historical context: what the data since 1950 says
US midterm elections traditionally fall in the middle of a presidential term, when Congress is up for re-election. 2026 is exactly such a year. In October, the S&P 500 index lost 0.9%. An analysis of similar situations shows that since 1950 there have been five such cases — declines in October 1954, 1970, 1978, 1990, and 2018. And each time November brought gains: +8.1%, +4.7%, +1.7%, +6%, and +1.8% respectively. The average November result after a weak October was 4.5%, and the median was 4.7%.
The picture for December is less clear-cut: in four out of five cases the month closed in positive territory with an average result of 1.1%. The only exception was 2018 with a 9.2% plunge — at that time the market was reacting to Donald Trump's first presidential term. The sample is small — only five observations — and the 2018 example clearly demonstrates that December can wipe out a November rebound.
Bitcoin versus the S&P 500 over five years
When comparing simple price appreciation, Bitcoin underperformed the index. Over five years it rose 26%, while the S&P 500 gained 75%. Someone who bought Bitcoin in a lump sum and simply held it earned less than the owner of an index fund.
However, the dollar-cost averaging (DCA) scenario, in which an investor purchases the asset with a fixed amount at equal intervals regardless of price, produces a different outcome. The calculation is based on purchases of $1,000 per month from November 2021 to October 2026; for the S&P 500, the SPY fund with dividend reinvestment was used.
Over 60 months, $60,000 was invested in each portfolio. By the end of the period, the S&P 500 portfolio was worth about $93,000, while the Bitcoin portfolio was worth approximately $107,000. At its peak at the end of 2025, its value approached $150,000.
For the first two years, the Bitcoin portfolio stayed below not only the index but also the amount invested. Purchases continued during the 2022 decline, when the same $1,000 bought more coins. When the price went up in 2024, the accumulated volume sharply increased the portfolio's value. This approach allows you to harvest the benefits of Bitcoin's volatility.
Short-term drawdowns — whether a negative October in the stock market or a deep Bitcoin correction — have historically not meant the end of growth. The result depends on discipline and the chosen strategy.
Cryptalist analysis: The case clearly demonstrates that comparing Bitcoin and traditional indices is only valid with an adjustment for the entry strategy. The high volatility of the first cryptocurrency, usually perceived as a drawback, becomes a source of additional returns under systematic averaging through accumulation during drawdowns. For institutional investors, this is an argument in favor of algorithmic DCA approaches as a way to mitigate the risk of poor timing in an extremely uneven digital asset market.