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Crypto Recorded 'Santa Claus Rally' 8 Times in Last 10 Years

4.1
| by
Yuqian Lim
-

How Often Does a Santa Claus Rally Happen in Crypto?

From 2014 to 2023, crypto experienced the Santa Claus rally effect 8 out of 10 times post-Christmas, with total crypto market capitalization rallying between 0.69% to 11.87% over a one-week timeframe from December 27 to January 2. This was adapted from the definition of Yale Hirsch, who is credited with coining the term ‘Santa Claus Rally’ to refer to market performance from the last five trading days of the year and first two trading days of the following year.

On the other hand, the crypto Santa Claus rally has happened fewer times during the week leading up to Christmas day, at just 5 times over the past 10 years. Similar to the post-Christmas Santa Claus rallies, these pre-Christmas rallies ranged from 0.15% to 11.56%. 

Among the years when crypto experienced a pullback instead of a Santa Claus rally, 2017 was hit with the largest decrease of 12.12% pre-Christmas, as prices crashed after the ICO run-up that year. Aside from that, pre-Christmas crypto market corrections have been lower, ranging from 0.74% to 1.25%. Meanwhile, the post-Christmas pullbacks in 2021 and 2022 saw decreases of 5.30% and 1.90% respectively.

Notably, only 3 out of the last 10 years have enjoyed the crypto Santa Claus rally both before and after Christmas. The 3 years that recorded consistent crypto Santa Claus rallies are: 2016, when total crypto market capitalization rose 11.56% before Christmas and 10.56% after; 2018, which saw more modest rallies of 1.31% and 4.53% despite market corrections throughout the year; and 2023, when crypto gained 4.05% before and 3.64% after Christmas, amid a recovery from the bear market.

In comparison, total crypto market capitalization has recorded both relatively larger increases and decreases across December as a whole. In 5 out of the last 10 years, the crypto market grew between 16.08% to 94.19% over the month from December 1 to 31. In the other 5 years when there were pullbacks instead, the crypto market shrank by 1.73% to 15.56% in the month of December. 

Overall, these conflicting market performances seem to highlight that the crypto Santa Claus rally is not a consistent phenomenon. 

Does Bitcoin Price Go Up During Christmas?

Over the last 10 years, Bitcoin has experienced the Santa Claus rally effect 7 times in the week leading up to Christmas, and 5 times in the period afterwards. Specifically, the Bitcoin Santa Claus rally ranged from 0.20% to 13.19% pre-Christmas, and 0.33% to 10.86% post-Christmas. This is in line with the Santa Claus rally effect on the broader crypto market.

Bitcoin’s largest Santa Claus rally of 13.19% happened in the week leading up to Christmas in 2016, as Bitcoin price climbed to reclaim the $1,000 level.

 

 

Bitcoin’s largest pullback, instead of a Santa Claus rally, also occurred in 2017 when Bitcoin price dropped 21.30% pre-Christmas. Bitcoin saw other smaller pre-Christmas dips of 1.37% in 2015 and 0.11% in 2019. Meanwhile, post-Christmas decreases in Bitcoin price ranged from -0.04% to -6.42%.

In other words, if a speculator bought and sold the Bitcoin Santa Claus rally every year from 2014 to 2023, they would have achieved an average gain of 1.32% for the pre-Christmas timeframe and 1.29% post-Christmas. Whereas speculating on Bitcoin price performance across the month of December would have resulted in an average return of 9.48%, or at least 7 times more than the gains from Bitcoin Santa Claus rallies.

As with the crypto Santa Claus rally however, the Bitcoin Santa Claus rally effect appears to be an inconsistent phenomenon.

Crypto Santa Claus Effect in the Last 10 Years

The Santa Claus effect on crypto each year, based on percentage change in daily total crypto market capitalization over each specified timeframe, are as follows:

Year Crypto Santa Claus Effect for Christmas Crypto Santa Claus Effect After Christmas
2014 -1.25% 0.69%
2015 -1.10% 2.56%
2016 11.56% 10.56%
2017 -12.12% 11.87%
2018 1.31% 4.53%
2019 -0.74% 0.72%
2020 -0.88% 10.02%
2021 6.90% -5.30%
2022 0.15% -1.90%
2023 4.05% 3.64%

The Santa Claus effect on Bitcoin each year, based on percentage change in daily Bitcoin price over each specified timeframe:

Year Bitcoin Santa Claus Effect for Christmas Bitcoin Santa Claus Effect After Christmas
2014 0.20% -0.04%
2015 -1.37% 2.45%
2016 13.19% 9.70%
2017 -21.30% -6.42%
2018 10.02% 0.33%
2019 -0.11% -0.20%
2020 2.77% 10.86%
2021 8.34% -5.97%
2022 0.63% -1.68%
2023 0.82% 3.89%

Methodology

The study examined percentage changes in daily total crypto market capitalization for the last ten years, namely from December 1, 2014 to January 2, 2024, based on CoinGecko data. The two most widely-used definitions of the ‘Santa Claus effect’ or ‘Santa Claus rally’ were considered, as per Investopedia: Pre-Christmas, which refers to the week leading up to Christmas day i.e. December 19 to 25, and post-Christmas, which refers to the last five trading days of the year followed by the first two trading days of the next year.

This study is for illustrative and informational purposes only, and is not financial advice. Always do your own research and be careful when putting your money into any crypto or financial asset.


If you cite these insights, we would appreciate a link credit to this article on CoinGecko, which allows us to keep supplying you with useful data-led content.

Curious to find out more about our previous research studies & statistics? Check out this one we did on the most popular blockchain ecosystems.

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Yuqian Lim
Yuqian Lim
Yuqian is a crypto research analyst at CoinGecko, covering a range of topics from NFTs to ETFs, crypto adoption and interest, and beyond. She's especially fascinated by the philosophical and socioeconomic aspects of crypto. She holds a Bachelor of Social Sciences with Honors from the National University of Singapore. Follow the author on Twitter @solosbrqt

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