‘Hold in May and stay,’ analysts say as Trump-driven bitcoin catalysts outweigh strategic reserve uncertainty

This time is different, according to analysts at K33, who argue in favor of a "hold in May and stay" strategy rather than the tried and tested mantra of "sell in May and walk away" that crypto has inherited from traditional markets.

The old adage has some merit in older markets like the S&P 500, showing weaker average performance between May and October compared to November through April. However, it still tends to be positive, just with lower returns and higher volatility over extended time frames. 

While this seasonal impact has also become popular in crypto, trader and former NYSE Arca market maker Eric Crown noted last month that the start of May has seen the beginning of a significant decline in 50% of bitcoin's much shorter 14-year observable trading history.

A 50/50 toss-up isn't particularly helpful to participants, but four of those declines coming in the past four years perhaps explain their increased confidence in the mantra.

"There are few fully satisfying explanations as to why we have observed this seasonality of returns, but the vacation effect and tax deadlines may represent one key performance dampener," K33 Head of Research Vetle Lunde and Senior Analyst David Zimmerman noted in a Tuesday report. "Further, summers generally tend to see fewer catalysts than the rest of the year."

However, things are shaping up to be different this time around, the K33 analysts argue, with plenty of President Trump-driven catalysts on the horizon in the summer of 2025. "While Trump's overall market impact is an annoyance, one has to accept the market for what it is," they said. "Right now, it is a broad Trump trade; his moves impact risk tolerance and skew forward expectations. Onwards, crypto is about to face multiple Trump-driven positive developments, whereas equities may face a tariff repeat — setting the stage for relative bitcoin strength in the months ahead."

Trump's first crypto-related executive order came within a few days of his inauguration in January, creating a "Presidential Working Group on Digital Asset Markets" chaired by White House crypto czar David Sacks — tasked with developing a federal regulatory framework for digital assets, including stablecoins and work to evaluate the creation of a "strategic national digital assets stockpile." The group was given a 180-day deadline to submit a comprehensive report on this task, due on July 22.

However, Trump accelerated this work on March 6, signing another executive order to create a U.S. Strategic Bitcoin Reserve, established from the approximate 200,000 BTC ($19 billion) already owned by the federal government that was forfeited as part of criminal or civil proceedings, minus those that still need to be returned to victims of crime.

Additionally, Trump directed Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to develop budget-neutral strategies for acquiring additional bitcoin, provided they have no incremental costs to American taxpayers.

The executive order also established a U.S. Digital Asset Stockpile, consisting of digital assets other than bitcoin forfeited in criminal or civil proceedings. However, the government will not acquire additional assets for the stockpile beyond those obtained through forfeiture proceedings.

Federal agencies were scheduled to submit reports by April 5 outlining their authority to transfer digital assets to the reserve. Details on budget-neutral acquisition strategies were then expected 60 days after the executive order, around May 5, when Bessent was due to deliver an evaluation of the legal and investment considerations for the reserve.

But those deadlines have now come and gone without any public announcements of their findings. "The 60-day deadline for the Treasury’s evaluation of the Strategic Bitcoin Reserve passed without a public announcement, leaving the timeline and details unclear," Lunde and Zimmerman said. "Findings from the report have yet to be disclosed but might represent a significant valve of volatility in the weeks to come."

On Tuesday, New Hampshire became the first state to pass a "Strategic Bitcoin Reserve" bill, and other states, including Arizona, Illinois, Maryland, Michigan, and Texas, are also considering similar legislation.

Heavier Trump catalysts on the horizon

Trump's tariff announcements hit both traditional and crypto markets hard between February and early April, before a 90-day tariff pause on most countries offered relief that has continued into May.

"A tariff postponement means one thing — the topic will resurface with all its horrifying glory in the midst of the summer," the K33 analysts warned. "The likelihood of markets re-experiencing the April chaos is thus relatively high, forcing market participants into risk-averse positioning."

However, they argued that bitcoin proved robust during April's drawdown, with the S&P 500's deepest down days outpacing the foremost cryptocurrency — a very rare feat of lower BTC beta during periods of market turmoil that cooled correlations. "The aforementioned balance of a potential Strategic Bitcoin Reserve vs. the potential negative company-specific long-term implication of tariffs on earnings and employment points toward stronger fundamentals for bitcoin over equities," they said. 

The analysts acknowledged that risk aversion prevails across all markets. However, bitcoin derivatives have faced sustained weak premiums, demonstrated by funding rates hovering in negative territory since April, they noted. With traders not looking to build leveraged long exposure, risks of cascading long liquidations pushing bitcoin lower are low, they said — constructive in the medium to long-term.

"On balance, potential positive crypto catalysts and looming downside risk in equities favor bitcoin ahead," they concluded. "Our plan has been clear: reaccumulate BTC south of $80k and hold. We're now entering a period designated for holding."