The 2026 FIFA World Cup in North America is set to kick off on June 11. There has long been a belief in the market known as the "World Cup Curse," where major global stock markets tend to perform poorly and experience a significant decrease in trading volume during the World Cup event.

Whether you are getting ready with beer and peanuts to enjoy the games or planning to keep an eye on both the matches and the market, let's explore whether the "World Cup Curse" is indeed real. What are the reasons behind this phenomenon?

Understanding the "World Cup Curse" through Data

Historical data shows that during the World Cup period, the performance of major global stock markets has generally been weak. Taking the example of the U.S. S&P 500 Index, during the 19 World Cup tournaments from 1950 to 2022, the average expected return of the S&P 500 Index during the event was around -1.5% to -2.11%.

As shown in the chart above, out of the past 19 World Cup tournaments, the S&P 500 Index has experienced negative returns 11 times (58% of the time). Especially in recent years, during the 2010 South Africa World Cup (-4.1%), 2018 Russia World Cup (-0.8%), and 2022 Qatar World Cup (-3.5%), U.S. stocks have seen declines.

The A-share market has similarly not been spared. According to statistics, during the 7 World Cup tournaments since 1994, the Shanghai Composite Index has fallen 5 times, with a high decline probability of 71%. Among these, during the 1994 U.S. World Cup, the Shanghai Index plummeted by 30.15%, and during the 2018 Russia World Cup, it fell by 7.17%. Only in 2002 (stimulated by favorable policies) and 2006 (in the midst of a super bull market) did it record gains.

Now let's take a look at the cryptocurrency market:

- During the 2010 South Africa World Cup: rose by about 15%

- During the 2014 Brazil World Cup: fell by about 7.1%

- During the 2018 Russia World Cup: fell by about 16.5%

- During the 2022 Qatar World Cup: rose by about 4.3%

Now that we have the data, let's analyze the reasons behind this trend.

The Origin of the "World Cup Curse"

Did the World Cup really have a significant impact on the market? There was an impact, but it was not substantial.

First, let's look at the part where there was an impact. A paper by the European Central Bank (ECB) analyzed minute-level trading data from 15 international stock exchanges during the 2010 World Cup. The study found that during the World Cup matches, stock market trading activity indeed decreased:

- Overall trading volume decreased by around 33% from normal levels

- When the national team played, trading volume plummeted by 55%, with the number of trades dropping by 45%

- Key events during the matches (such as goals) caused a further 5% drop in trading volume

The outcome of the matches also affects the mood of fans in each country. The research found that when a country's national team lost a match in the World Cup, the country's stock market often experienced significant negative abnormal returns on the next trading day (up to 49 basis points). This negative emotion stemming from the defeat in the match does spill over into investment decisions, leading to market sell-offs.

But why do we say the impact was not significant? Wall Street has an old saying, "Sell in May and go away." The stock market itself exhibits a seasonal pattern, with May to October usually being the weakest period of the year (especially June to August). The traditional summer World Cup (June-July) coincides with this weak seasonal window.

As shown in the chart above, in the monthly average returns throughout the year, June (+0.44%) and August, September are often the most lackluster or negative months of the year. This means that the traditional summer World Cup (usually held from mid-June to mid-July) falls precisely within the least upwardly mobile phase of the stock market in a year.

The 2022 Qatar World Cup is the first World Cup in history to be held in the winter of the Northern Hemisphere (November-December). This unique timing provides a "control variable experiment" to validate the theory mentioned above.

Although the S&P 500 still dropped by 3.5% during the Qatar World Cup (largely influenced by the macro environment of the Fed's aggressive rate hikes at the time), the decline in trading volume during the winter World Cup (about -18%) was significantly smaller than during the traditional summer World Cup (-33%). This indicates that when the World Cup is held outside the summer offseason, its draining effect on market liquidity is somewhat reduced. This also disproves that a significant part of the "World Cup curse" should be attributed to the seasonal trough of June and July themselves.

Compared to the stock market, the cryptocurrency market has shown that the World Cup has little impact on the market. Since the birth of Bitcoin, during the four World Cup events, the market has actually found more direct catalysts for price movements:

- 2010 South Africa World Cup: On May 22, 2010, the familiar story happened—programmer Laszlo Hanyecz bought two pizzas for 10,000 bitcoins, marking the first real-world transaction with Bitcoin and providing an initial consensus on its real-world value. Three days after the World Cup ended (July 17, 2010), the famous Mt. Gox exchange officially launched, signaling Bitcoin's entry into organized trading.

- During the 2014 Brazil World Cup: Bitcoin was in a bear market following the collapse of the 2013 bull run (with a peak above $1,100). In February 2014, Mt. Gox, the world's largest Bitcoin exchange at the time, declared bankruptcy after losing hundreds of thousands of bitcoins in a hack, delivering a devastating blow to the entire industry. Market sentiment remained fragile during the World Cup. Additionally, on June 27, the U.S. Department of Justice publicly auctioned nearly 30,000 bitcoins seized from the Silk Road, further intensifying selling pressure and uncertainty in the market.

- During the 2018 Russia World Cup: This period saw a market correction following the end of the 2017 bull market. The ICO bubble had burst, and global regulations were tightening significantly. Throughout the World Cup, the crypto market faced bearish news. On June 22, the major Korean exchange Bithumb was hacked, losing $30 million. In early July, the U.S. SEC once again delayed/rejected multiple Bitcoin ETF applications.

- During the 2022 Qatar World Cup: In early November 2022 (a week before the World Cup began), FTX collapsed. Additionally, on December 13, the Federal Reserve announced a 50 basis point interest rate hike, leading to continued tightening of macro liquidity, exacerbating the situation.

It is also important to consider that Bitcoin, as a 24/7 global asset, is less affected by traditional holiday seasonality, and its strong halving cycle every four years. In the face of macro liquidity and its own cyclical nature, the World Cup's effect can be considered minimal.

Investment Opportunities During the World Cup

With technological advancements and changing consumer habits, over the past two decades (2006-2026), the landscape of industries benefiting from the World Cup has evolved.

In the past, we watched the World Cup on TV. During the 2006 and 2010 World Cups, traditional TV and set-top box manufacturers often experienced significant excess returns.

However, by the time of the 2018 FIFA World Cup, although traditional TV broadcasting rights still accounted for the majority of revenue, the excessive gains of color TV companies had dropped to 0. By 2022, domestic color TV sales during the World Cup had not increased but instead decreased, with the industry experiencing a decline in both volume and price, causing the stock prices of related listed companies to underperform the market.

Streaming has officially replaced traditional TV as the core channel for watching the World Cup. The viewership on the streaming platform during the 2022 Qatar World Cup reached a historic high. If you are optimistic about World Cup viewership, perhaps you should pay more attention to those streaming companies with exclusive broadcasting rights that can translate into revenue.

Beer and sporting goods (such as Nike and Adidas) are classic consumer products of the World Cup, and their sector has consistently performed well in previous World Cup tournaments. However, in recent years, they have also faced the challenge of slowing growth.

According to data from investment bank Jefferies, global beer sales increased by 3.6% during the 2006 and 2010 World Cups. However, data from IWSR shows that from 2014 to 2024, global overall beer consumption actually decreased by 3%, with the younger generation preferring low-alcohol or non-alcoholic beverages.

In other words, stocks of beers like Budweiser and Tsingtao still have a chance, but new beverage stocks and new forms of bars that are more popular among young people may also perform well.

Compared to buying jerseys and sneakers, young people may also prefer soccer player cards, which can highlight the advantages of blockchain technology. For example, taking the fragmented card platform Grail on the Base chain, the token price of a Ronaldo card has increased nearly a hundredfold since May 5, and the token price of a Mbappé card has increased nearly 300 times since May 5.

Sports betting is also a classic beneficiary sector of the World Cup, but the growth of the prediction market is also very rapid; however, there are currently not many good investment targets in the prediction market.

Conclusion

For a good World Cup viewing experience, it is also a good choice to detach from the market and relax.

Israeli economists Guy Kaplanski and Haim Levy published a study in the Journal of Financial and Quantitative Analysis in 2010 that has been cited over 261 times, stating:

“During the World Cup, the average return of the U.S. stock market is -2.58%, while the average return on all trading days during the same period is +1.21%. The most natural investment strategy is to short sell stocks before the start of the World Cup, which will further enhance the downward pressure on stock prices.”

While there hasn't been a famous event of a full sell-off directly linked to the World Cup, the World Cup period is indeed a time of poor liquidity. Whether the specific reasons for market movements are directly related to the World Cup or not, simply enjoying the World Cup itself may be the best defensive posture during a period of reduced market liquidity.

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