Author: Lim Yu Qian Translation: Vernacular Blockchain

From 2014 to 2023, the crypto market Of the 8 post-Christmas “Santa Claus runs” that have occurred in 10 years, the total crypto market cap rose by 0.69% in the week from December 27 to January 2 to 11.87%. This phenomenon draws on the definition of Yale Hirsch, who is considered to be the originator of the term "Santa Claus Quote", which originally refers to the market performance of the last five trading days of each year and the first two trading days of the following year.

On the other hand, crypto markets have seen less frequent “Santa Claus runs” in the week before Christmas, having only occurred five times in the past 10 years. Similar to post-Christmas moves, these pre-Christmas gains ranged from 0.15% to 11.56%.

1. How does the "Santa Claus Quote" perform in the encryption market?

In years without a "Santa Claus run," the crypto market experienced its largest correction before Christmas in 2017, down 12.12%. This drop was the result of a price collapse that followed that year’s ICO craze. Beyond that, the pre-Christmas crypto market correction was smaller, ranging between 0.74% and 1.25%. Meanwhile, the post-Christmas market corrections in 2021 and 2022 were 5.30% and 1.90% respectively.

It is worth noting that only three of the past 10 years have seen a "Santa Claus market" in the crypto market around Christmas. These three years are:

In 2016, the total market value of the crypto market increased by 11.56% before Christmas and by 10.56% after Christmas;

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In 2018, although the market was in adjustment throughout the year, modest gains of 1.31% and 4.53% were recorded before and after Christmas;

In 2023, amid the bear market recovery environment, the crypto market rose 4.05% before Christmas and 3.64% after Christmas.

In contrast, the performance of the total crypto market capitalization throughout December was more extreme. In 5 of the past 10 years, the overall market grew by 16.08% to 94.19% in December. In the other 5 years In the case of a correction, the market decline in December was between 1.73% and 15.56%.

Generally speaking, the "Santa Claus market" in the encryption market is not a stable phenomenon, and its performance varies significantly and is difficult to predict.

2. Will Bitcoin rise during Christmas?

In the past 10 years, Bitcoin has experienced a "Santa Claus move" in the week before Christmas 7 times, while the effect occurred in the week after Christmas The number of times is 5 times. Specifically, Bitcoin’s pre-Christmas gains ranged from 0.20% to 13.19%, while post-Christmas gains ranged from 0.33% to 10.86%. This is consistent with the broader crypto market “Santa Claus” performance.

Bitcoin’s biggest “Santa Claus run” occurred in the week before Christmas in 2016, when the price of Bitcoin rose by 13.19% and exceeded 1,000 dollar threshold.

Bitcoin's biggest decline occurred in 2017, not the "Santa Claus market." At that time, Bitcoin prices fell by 21.30% before Christmas. Additionally, Bitcoin also experienced smaller pre-Christmas losses of 1.37% and 0.11% in 2015 and 2019, respectively. After Christmas, Bitcoin’s price fell between -0.04% and -6.42%.

In other words, if a speculator participated in Bitcoin's "Santa Claus run" every year from 2014 to 2023, buying the week before Christmas If you buy and sell, the average return is 1.32%; if you do the same thing the week after Christmas, the average return is 1.29%. By comparison, if speculators had chosen to participate in Bitcoin price fluctuations throughout December, their average return would have been 9.48%, at least 7 times the "Santa Claus run" gain.

However, similar to the "Santa Claus Quote" in the crypto market, Bitcoin's "Santa Claus Quote" effect also exhibits inconsistent characteristics.

3. PastThe "Santa Claus Effect" in the crypto market in 10 years

The following is the "Santa Claus Effect" data based on the daily percentage change in the total market capitalization of the crypto market:

Bitcoin's "Santa Claus Effect" data over the years, based on the daily price of Bitcoin in each specific time period Percent change:

4. Summary: Methodology

This study is based on CoinGecko data and examined the past ten years (i.e. December 2014 1 to January 2, 2024) The daily percentage change in the total market capitalization of cryptocurrencies. The study draws on the two most common definitions of the "Santa Claus Effect" or "Santa Claus Quotation" from Investopedia:

Pre-Christmas: refers to the week before Christmas , that is, December 19th to 25th.

Late Christmas period: refers to the last five trading days of the year plus the first two trading days of the following year.

This research is for illustrative and informational purposes only, not financial advice. Always do your own research and exercise caution before investing in any cryptocurrency or financial asset.