Executive Summary
Bloomberg Intelligence reports that the long‑standing “Sell in May and go away” pattern for U.S. equities is losing its potency. The S&P 500 ETF (SPY) closed the May‑October stretch positive in 25 of the last 33 years, but only one negative summer has occurred in the past decade. At the same time, U.S. spot Bitcoin ETFs have amassed roughly $58.3 billion in net inflows, with $1.5 billion added in just one week (April 17‑24). Federal Reserve research now flags crypto ETF bid‑ask spreads as comparable to equity peers, underscoring a growing convergence between the two asset classes.
What Happened
Bloomberg Intelligence analyzed SPY performance over the May‑October window and found that the seasonal advantage once prized by traders has shrunk dramatically. While the cumulative return for the window since 1993 sits at about 171 %, the November‑April period still delivers a far stronger 731 % gain. In parallel, data from Farside Investors shows that U.S. spot Bitcoin ETFs have drawn $1.5 billion in net inflows during the week of April 17‑24, pushing total inflows to $58.3 billion since the products launched in 2023.
Background / Context
The “Sell in May” adage dates back decades, based on the observation that equity markets historically underperform in the summer months. Bloomberg Intelligence’ latest figures suggest that the pattern is weakening, with only one negative summer stretch recorded in the last ten years. The shift coincides with Bitcoin’s deeper integration into conventional portfolio flows, as institutional investors allocate billions to spot Bitcoin exchange‑traded products. Federal Reserve research adds another layer, noting that crypto ETF bid‑ask spreads now mirror those of similarly sized equity ETFs. The report also cautions that NAV premiums in crypto funds could become a useful barometer of the growing inter‑connection between crypto and traditional markets.
Reactions
Market strategists at Bloomberg Intelligence argue that the fading seasonal edge could alter traditional summer trading tactics, prompting investors to reassess risk‑off moves that have long been tied to the calendar. Meanwhile, analysts covering crypto ETFs point to the steady stream of inflows as evidence that Bitcoin is no longer viewed solely as a speculative token but as a legitimate portfolio diversifier. The Federal Reserve’s observation on spread parity has been welcomed by regulators, who see it as a sign that crypto products are maturing and aligning with existing market infrastructure.
What It Means
For equity traders, the diminishing “Sell in May” signal means that summer‑time risk aversion may no longer be an automatic defensive stance. Portfolio managers might keep equity exposure longer, especially if macro data remains benign. For crypto investors, the massive inflows into Bitcoin ETFs signal confidence in the asset’s role as a hedge or return enhancer within diversified portfolios. The convergence of spread structures suggests that pricing inefficiencies between crypto and equity markets are narrowing. As a result, arbitrage opportunities that once existed due to wider crypto spreads may disappear, pushing market participants to focus on fundamental drivers rather than pure technical mismatches.
What Happens Next
The upcoming macro calendar will test both narratives. Key events include the Federal Reserve’s policy meeting on April 28‑29 and Chairman Powell’s press conference, the Q1 GDP and March PCE release on April 30, April payroll data on May 8, April CPI on May 12, the FOMC minutes on May 20, and the next full Fed meeting on June 16‑17. If growth remains steady and inflation stays contained, analysts project Bitcoin could trade between $72,000 and $85,000 through the summer. A shift toward weaker growth or higher inflation could pull the price down to a $65,000‑$72,000 band. Should the equity market continue to defy the traditional summer dip, the “Sell in May” rule may finally lose its relevance, reshaping seasonal trading playbooks for years to come.