Author: Lim Yu Qian, CoinGecko; Compiler: Deng Tong, Golden Finance

How often does the Christmas market in the cryptocurrency industry happen?

From 2014 to 2023, cryptocurrencies experienced 8 out of 10 post-Christmas market rebound effects. In the week from December 27th to January 2nd, the total market value of cryptocurrency increased. 0.69% to 11.87%. (The Christmas market refers to the market performance of the last five trading days of the year and the first two trading days of the following year.)

On the other hand, the week before Christmas, the cryptocurrency Christmas market occurs less often , which has only occurred five times in the past 10 years. Similar to the post-Christmas moves, these pre-Christmas moves range from 0.15% to 11.56%.

In years when cryptocurrencies have experienced corrections rather than Christmas surges, 2017 suffered its largest drop of 12.12% just before Christmas, as ICOs were banned that year. Apart from this, the pre-Christmas crypto market correction was lower at 0.74% to 1.25%. Meanwhile, there were post-Christmas pullbacks in 2021 and 2022, with losses of 5.30% and 1.90% respectively.

It’s worth noting that only 3 of the past 10 years have enjoyed a crypto Christmas run around Christmas. The three years in which the cryptocurrency Christmas market has continued to rise are: 2016, when the total market value of cryptocurrency increased by 11.56% before Christmas and by 10.56% after Christmas; in 2018, despite the market adjustment throughout the year, the increase was more moderate, at 1.31%. and 4.53%; in 2023, as the bear market revived, the cryptocurrency rose by 4.05% before Christmas and by 3.64% after Christmas.

In contrast, the total cryptocurrency market capitalization experienced larger increases and decreases throughout December. In 5 of the past 10 years, from December 1 to December 31, the cryptocurrency market has grown between 16.08% and 94.19%.

Overall, these conflicting market performances seem to highlight that the crypto Christmas market is not a very regular phenomenon.

Will Bitcoin prices rise during Christmas?

In the past 10 years, Bitcoin has experienced seven Christmas rally effects in the week before Christmas and five in the week after Christmas. Specifically, the Bitcoin Christmas market rose from 0.20% to 13.19% before Christmas, and from 0.33% to 10.86% after Christmas.

Bitcoin’s biggest Christmas rally of 13.19% occurred in the week before Christmas 2016, when the price of Bitcoin climbed to the $1,000 level.

Bitcoin’s biggest correction also occurred in 2017, when the price fell by 21.30% before Christmas. Bitcoin fell by 1.37% before Christmas 2015 and by 0.11% in 2019. Meanwhile, post-Christmas declines in Bitcoin prices ranged from -0.04% to -6.42%.

In other words, if speculators bought and sold Bitcoin during Christmas every year from 2014 to 2023, their average gain before Christmas would be 1.32% and their average gain after Christmas would be Reached 1.29%. The average return for speculating on Bitcoin’s price performance in December is 9.48%, which is at least 7 times the return of Bitcoin’s Christmas market.

However, like the cryptocurrency Christmas rally, the Bitcoin Christmas rally effect appears to be an inconsistent phenomenon.

Cryptocurrency Christmas market effects over the past 10 years

Based on the percentage change in the total daily cryptocurrency market capitalization in each specified time frame, the annual Christmas market impact on cryptocurrencies is as follows:

The annual impact of the Christmas market on Bitcoin, based on the percentage change in the daily Bitcoin price for each specified time frame: