Markets historically deliver their strongest returns under divided government rather than full political sweeps, according to analyst Benjamin Cowen.

He examined the performance of the S&P 500, Bitcoin (CRYPTO: BTC) and gold across different U.S. political power structures — with surprising conclusions.

BTC On Political Party Sweeps

In a podcast published on May 13, Cowen argued Bitcoin historically reacts poorly to full political party "sweeps," as both Democratic and Republican control correlate with weaker median returns despite strong outlier years like 2017.

He noted Bitcoin's best median performance has historically come under split governments, suggesting markets may prefer political gridlock and reduced policy uncertainty.

With the Republican sweep, the crypto king went up 410% on an average while the Democratic ruling led to an average -2% return triggered by a significant slump under Biden.

The analysis also highlighted that Bitcoin is down roughly 7% so far this year versus historical midterm-year averages of +65%, raising the possibility of heightened volatility or even a deeper reset if macro conditions deteriorate.

What's Next

Cowen said that markets generally trend higher over time regardless of political party control.

The S&P 500 continued climbing across multiple shifts in political leadership over recent decades despite changes in presidential administrations, congressional control, monetary policy environments and economic cycles.

Cowen added that a future split Congress in 2027 could potentially become bullish for Bitcoin based on prior historical patterns, though the dataset remains limited due to Bitcoin's relatively short trading history.

He also emphasized that long-term market structure and liquidity conditions may ultimately matter more than short-term political narratives alone.

Image: Shutterstock