Author: Lim Yu Qian, CoinGecko; Translated by: Deng Tong, Golden Finance
How often does a Christmas rush happen in the cryptocurrency industry?
From 2014 to 2023, cryptocurrencies experienced Christmas rally effects 8 out of 10 times after Christmas, with the total market value of cryptocurrencies rising by 0.69% to 11.87% in the week from December 27 to January 2. (Christmas rally refers to the market performance in the last five trading days of the year and the first two trading days of the next year.)
On the other hand, crypto Christmas rallies have occurred less frequently in the week leading up to Christmas, with only five of them occurring in the past 10 years. Similar to the post-Christmas rallies, these pre-Christmas rallies have seen gains ranging from 0.15% to 11.56%.
Among the years when cryptocurrencies experienced a correction rather than a Christmas rally, 2017 saw the biggest drop of 12.12% before Christmas, as ICOs were banned that year. Apart from that, the corrections in the crypto market before Christmas were lower, ranging from 0.74% to 1.25%. Meanwhile, 2021 and 2022 saw corrections after Christmas, with declines of 5.30% and 1.90%, respectively.
It is worth noting that only three of the past 10 years have enjoyed a cryptocurrency Christmas rally around Christmas. The three years of sustained cryptocurrency Christmas rally are: In 2016, the total cryptocurrency market value rose by 11.56% before Christmas and 10.56% after Christmas; In 2018, despite the market adjustment throughout the year, the increase was relatively mild, 1.31% and 4.53% respectively; In 2023, as the bear market recovered, cryptocurrencies rose by 4.05% before Christmas and 3.64% after Christmas.
In contrast, the total cryptocurrency market capitalization saw larger increases and decreases throughout December. In five of the past 10 years, the cryptocurrency market’s growth rate from December 1 to December 31 ranged from 16.08% to 94.19%.
Overall, these conflicting market performances seem to highlight that the crypto Christmas rally is not a very regular phenomenon.
Will Bitcoin Price Increase During Christmas?
In the past 10 years, Bitcoin has experienced 7 Christmas rally effects in the week before Christmas and 5 in the week after Christmas. Specifically, the increase in Bitcoin's Christmas market was 0.20% to 13.19% before Christmas and 0.33% to 10.86% after Christmas.
Bitcoin’s biggest Christmas rally was 13.19%, which occurred a week before Christmas in 2016, when the price of Bitcoin climbed to the $1,000 level.
Bitcoin’s biggest pullback also occurred in 2017, when the price of Bitcoin fell 21.30% before Christmas. Bitcoin fell 1.37% before Christmas in 2015 and 0.11% in 2019. Meanwhile, the declines in Bitcoin prices after Christmas 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 1.29%. The average return of Bitcoin price performance in December is estimated to be 9.48%, at least 7 times the return of Bitcoin Christmas market.
However, like the Christmas rallies in cryptocurrencies, the Bitcoin Christmas rally effect appears to be an inconsistent phenomenon.
The Christmas effect of cryptocurrencies over the past 10 years
Based on the percentage change in the total daily cryptocurrency market value within each specified time frame, the impact of the Christmas market on cryptocurrencies each year is as follows:
The Christmas market's annual impact on Bitcoin, based on the percentage change in the daily Bitcoin price in each specified time frame:
