30s Summary

The Santa Claus rally is a traditional increase in the stock market during the final week of December and the first two days of January, and there’s speculation this could affect the cryptocurrency market too. This phenomenon, which allegedly boosts investment portfolios, may not operate in the same way in the crypto sphere due to its round-the-clock nature. However, increased consumer spending during the holiday season might stimulate a rise in crypto investments. While its occurrence in the crypto world is uncertain, there were signs of it in late 2017 when Bitcoin rose significantly. Regardless, additional investments before year-end might produce substantial returns.

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So, you’ve heard of the halvening and Uptober, but do you know about the other big time in the year when crypto is likely to rise? Meet the Santa Claus rally, it’s like Christmas come early for crypto traders. If you’re dreaming of a green (profitable) Christmas, you’re gonna love this.

What makes us think a Santa Claus rally is a thing, and could it happen in 2024 like past years? Let’s dive into what this is all about.

The backstory of the Santa Claus rally starts way before the world of crypto. It’s usually seen in the final week of December and the first two days of January and has traditionally given a boost to investment portfolios. This phenomenon was first marked in 1972 by Yale Hirsch in his Stock Trader’s Almanac publication. He noticed the S&P 500 index generally went up during this period with an average gain of 1.3%.

But how does this relate to crypto?

Apparently, there’s a bunch of reasons why the stock market tends to perk up at the end of the year. Everything from investors looking to offset capital gains, to fund managers wanting their portfolios to look good in annual reports, to even decreased trading volumes leading to gradual price increases. However, it’s hard to see these reasons affecting the crypto market, given its round-the-clock nature.

What might be relevant to crypto is the general boost in consumer spending and optimism around the festive season. If you’ve just gotten a fat holiday bonus and have some time on your hands, why not play around with cryptos?

The Santa Claus rally is a well-documented thing in the regular stock market, but its existence in the crypto world is still uncertain. Even so, one thing that does seem to point toward a Santa Claus rally happening in crypto is a bullish phase in the market.

We can tick that box for crypto right now, especially after noting that in late 2017, Bitcoin surged by 68% over the two weeks crossing the New Year. Although the following years have been more subdued, there’s still potential for a big rally as we close out 2024, a year already record-breaking for cryptos.

I’m not suggesting that traders should go all-in betting on a Santa Claus rally, but it wouldn’t hurt to invest a bit more in your favorite cryptos before the year ends. Who knows, maybe you’ll get to enjoy a little holiday magic!

As we close out 2024, we see a mix of optimism and caution. The global economy is bouncing back and holiday spending is projected to be strong, both of which are promising for market sentiment. Unless a major global event occurs, there’s every reason to believe this cryptocurrency bull market can keep going.

And, hey, even if the Santa Claus rally doesn’t happen this time, no worries. Those investments you made now can still give you great returns next year as the crypto market continues to rise. So why not get into the holiday spirit, load up on some cryptos, and see if Santa comes to town?