Bitcoin hits new high this year! Biden's victory is almost certain, historical data shows: We are entering the best scenario in the US stock market

As of the deadline, electoral votes - Biden 243: Trump 214, may not reach the winning threshold of 270 electoral votes by today, the 5th.

So far, key battleground states with stable votes from both the Democratic and Republican parties seem to be secured. The crucial shift occurred yesterday when Biden surpassed Trump in Wisconsin with 10 electoral votes and Michigan with 16 electoral votes, making Trump's chances of winning increasingly slim. Even Pennsylvania, where Trump had a significant lead with 20 electoral votes, has seen a narrowing gap after a large number of mail-in votes were counted. Biden seems to have a firm lead while Trump has resorted to legal challenges in an attempt to salvage his campaign.

Regardless of the outcome, who wins will have the most favorable impact on the U.S. stock market? Historical data suggests that the distribution of "party affiliation of the president" and the seats in the "House and Senate" will exhibit different "positive" performances.

How the Stock Market Performs After the President is Elected

Investment research firm CFRA analyst Sam Stovall studied six election outcomes, with data dating back to 1945 in U.S. history. The variables were divided into two categories: "Presidential Party: Democratic or Republican" and "Congressional Governance: Unified or Divided," resulting in six scenarios. Historically, these six scenarios have yielded different average annual returns for the S&P 500 stock index.

In situations where a single party has complete control, the results are better for the Republican Party with a performance of 12.9%. In scenarios where one party controls Congress and the presidency is handed over to the other party, having the Republican Party in control with a Democratic president yields the best result at 13%. When both parties have an equal presence in Congress, having a Democratic president results in the best outcome among the six scenarios at 13.6%.

2020 Falling into the Best Scenario

Based on current results, it is almost certain that the Democratic Party's Biden will win. Currently, the Republican and Democratic parties have an equal number of seats in the House and Senate. Therefore, it is likely to fall into the scenario of "Democratic president & both parties in Congress being equally represented," which historically has yielded the best market returns.

Bitcoin and S&P500 Showing Positive Correlation

Since the end of May this year, Bitcoin and the S&P500 have shown a high positive correlation. From the start of the election until the approximate results emerged, the U.S. stock market has shown significant growth, and Bitcoin has successfully surpassed $14,000 from its pre-election level of $13,000, reaching a new high for 2020, once again confirming a positive correlation.

However, the highly positive correlation between Bitcoin and the U.S. stock market has occurred for a relatively short period. Whether they can maintain this trend remains to be seen.