A study from a cryptocurrency insight and analytic firm, SFOX, shows an interesting relation between holidays and coin value. The firm’s team of researchers spotted the pretty convincing correlation between holidays like Independence Day, Thanksgiving, and Christmas, with the first-ever cryptocurrency, Bitcoin. SFOX shared their findings before the recent Independence Day holiday. The firm was expecting Bitcoin to rise amidst the increasingly bullish cryptocurrency markets. However, Bitcoin nosedived nearly $1k in the 24 hours of the US birthday celebration. In this article, we will discover exactly which previous holidays show an increase for Bitcoin and explore some theories behind why holidays tend to cause a spike in the market.
Thanksgiving
The month of November has always been one to remember in the world of Bitcoin. However, November has also seen a more volatile market for the cryptocurrency than other months. “Since 2011, its biggest monthly change up to or down has occurred in November, with the average move coming in about 20 percentage points higher than the next largest.” The crypto market on Thursday, November 25, 2021, was not as quiet as some anticipated after bitcoin prices briefly broke past $59,000. This means that BTC to USD, rose by 3.25% on that Thursday, reversing a 0.72% loss from Wednesday.
Christmas
Personally, I can see why one would ask this question because Christmas correlates with another popular type of investment— stocks. Generally, stocks that sell popular gifting products (ex. clothes, toys, technology, etc.) are anticipated to have good earnings for the quarter that contains Christmas. But, the crypto world is not quite the same. For example, suppose well-known companies such as Amazon or Walmart started accepting Bitcoin as payment. In that case, that means the liquidity increases because now people can use Bitcoin to buy goods = increased demand. But, unfortunately, Amazon doesn't accept Bitcoin or other cryptocurrencies directly. But, this doesn’t mean you can’t use your coins to buy things from the retailer (another option is to fund Amazon gift cards using Bitcoin, Cardano, Ethereum, or whatever other cryptocurrencies you own.) But, it doesn’t mean that the high-demand holiday season will cause a surge in the market.
NYE & New Years Day
Many people were still nursing New Year hangovers on the first sluggish Saturday of 2021, Jan. 2. But there was no halt for bitcoin, which powered past $30,000 for the first time.
Other Possibilities
Open discussions around the dinner table and crypto FOMO may pique loved ones’ interest in investing, not to mention the flux in traders. There are fewer traders active in the market during the holiday season, or more traders in the market (for example, companies’ and investors' tax years end). This will also affect how volatile the prices are.
The Bottom Line
The fact that Bitcoin undergoes positive price movements around major holidays is undeniable. It shows in its record. For example, in 2017, Bitcoin was trading around the $6k mark before Thanksgiving. By Dec. 17, it was nudging $20k! I guess we can only wait to see!
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