The old Wall Street maxim “Sell in May and go away” is detrimental to bitcoin investors, market data from Messari suggests.
The largest cryptocurrency generated positive returns during eight of the past 10 Mays, outperforming its monthly average for that year during six of them.
“It’s just a meme to me,” said Qiao Wang, a cryptocurrency startup investor and former quantitative trader at Tower Research.
Read More: Bitcoin News Roundup for June 1, 2020
In May of last year, for example, bitcoin’s price gained more than 54% while the 2019 monthly average return was less than 8%. Bitcoin climbed almost 9% last month, just above the year-to-date monthly average of roughly 8.5%.
“It seems clear to me that you want to buy in May and go away,” Wang said of bitcoin.
During bearish cycles in 2015 and 2018, bitcoin performed worse in May than the year’s monthly average. But in 2011, during the cryptocurrency’s first bearish cycle, May returns outshined the year’s monthly average by 120 percentage points.
Nonetheless, market sayings like “Sell in May,” while lacking supporting fundamentals, often become self-fulfilling or are just simply the results of a statistical anomaly, said Sam Trabucco, a quantitative cryptocurrency trader at Alameda Research.
Speaking to bitcoin’s historical outperformance in May, Trabucco said, “I don’t see a reason to believe this particular pattern is anything but variance.”
Read more about
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.