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Bitcoin Price Holiday Trends: How 164 Festivities Across the World Impact BTC

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Toghrul Aliyev
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Key Takeaways
  • Traditional stock markets often experience positive pre-holiday returns across multiple regions.
  • ​​This analysis addresses Bitcoin’s response to global holidays.
  • Does Bitcoin mimic traditional asset patterns, or does its 24/7 trading place it in a category of its own?

In traditional financial markets, the effects of holidays on returns have been studied to the point of exhaustion. Market behavior changes around major holidays, like Christmas and New Year’s Day, and experienced traders anticipate these fluctuations, often taking advantage of the predictable movements to generate recurring annual patterns.

This “holiday effect” makes perfect sense in traditional markets: Exchanges close, trading volumes drop, and investors turn their attention away from the markets to focus on personal matters. Sentiment becomes more stable, as people spend time with family rather than glued to screens.

When it comes to Bitcoin (BTC), the research is far less developed. Bitcoin’s round-the-clock trading means activity doesn’t halt for holidays like Christmas Day.

This constant flow of transactions raises a question: Does Bitcoin mimic traditional asset patterns, or does its 24/7 trading place it in a category of its own?

​​This analysis addresses Bitcoin’s response to global holidays. It focuses on Bitcoin’s average and median returns before, during and after festivities.

To paint a global picture, this study covers holidays that bring traditional stock exchanges to a halt in high-GDP nations, markets with massive capitalization and regions with significant crypto adoption.

How Holidays Affect Traditional Market Performance

To truly grasp Bitcoin price holiday trends, it’s crucial to understand how holidays have historically impacted traditional markets.

One of the most notable patterns in the stock market is the Santa Claus Rally. This term describes the consistent increase in stock prices during the final five trading days of December and the first two trading days of January.

From 1950 to 2022, the S&P 500 gained 1% to 2% during this period, which occurred around 80% of the time.

Kim and Park (1994)  explored the holiday effect in the U.S., U.K. and Japan. The study revealed an intriguing trend: Abnormally high returns on the trading day preceding holidays.

Exchange Pre-Holiday Return Post-Holiday Return
S&P 500 0.2992% 0.0024%
FT 30 0.2228% -0.1405%
Nikkei 225 0.1897% 0.0711%

A similar trend was observed in the Chinese stock markets before Chinese Lunar New Year. From 1993 to 2015, Shanghai A-shares recorded returns ranging from 0.520% to 0.967% one to three days before the holiday, while Shenzhen A-shares showed returns from 0.252% to 1.353%.

On the first trading day after the holiday, the trend persisted, with Shanghai A-shares showing an average return of 0.897% and Shenzhen A-shares averaging 1.213% (Chia-Chen Teng, J. Jimmy Yang, 2018 ).

Day Shanghai A-shares Shenzhen A-shares
-4 -0.060% 0.399%
-3 0.520% 0.252%
-2 0.967% 1.353%
-1 0.877% 1.081%
1 0.897% 1.213%
2 -0.807% -0.388%
3 0.987% 0.652%
4 0.228% 0.083%

Fabozzi, Ma, and Briley (1994)  expanded earlier research by showing that both domestic U.S. markets and international futures markets also experience the pre-holiday effect.

Their study uncovered that futures contracts, such as those for Treasury bills, Treasury bonds and commodities like gold demonstrate significantly higher returns in the days leading up to holidays.

Futures Contract Pre-Holiday Return Post-Holiday Return
Gold Futures 0.387% -0.025%
Eurodollar Futures 0.177% 0.055%
Treasury Bill Futures 0.049% -0.01%
Treasury Bond Futures 0.018% -0.005%

Collectively, these studies indicate that the holiday effect spans across various regions and asset classes. The consistent pattern observed is that positive sentiment and reduced risk aversion drive higher pre-holiday returns, regardless of market size or geographic location.

So, why do these holiday patterns even occur, in the first place?

The holiday effect isn’t merely coincidental: It arises from a combination of behavioral and practical factors that impact market movements around key dates. Predictable breaks like holidays lead market participants—from retail traders to institutional investors—to modify their strategies.

Before major holidays, institutional investors often step back, trimming their positions or securing gains. At the same time, retail investors, who tend to be more optimistic, take the lead, often pushing prices higher.

As trading volumes thin out, even minor buying or selling pressures can cause substantial movements in asset prices. The market’s sensitivity increases, reflecting whatever sentiment remains, be it cautious optimism, short-term trading, or speculative moves.

There’s a psychological aspect at play as well. Holidays bring a sense of closure, prompting investors to adjust their positions in anticipation of market shutdowns. The expectation of reduced activity, coupled with holiday cheer, can result in price hikes, as traders expect less volatility.

Although the holiday effect is a common phenomenon, it’s not a certainty, as markets are shaped by a variety of factors. Trading on certain patterns can bring gains, but can also lead to surprising results.

Bitcoin Price Patterns Around Holiday Periods

We collected data on all holidays that resulted in exchange closures in their respective countries over a period from 2011 to 2023, using Investing.com. This study spanned 94 countries and 164 unique holidays.

Additionally, we assessed Bitcoin’s open-to-close returns on the trading day preceding the holiday and the day following it.

It’s important to note that the trading day immediately before or after a holiday wasn’t always the one we picked. In many cases, holidays stretched over several days, so we opted for the next available trading day to prevent overlap with the holiday period.

The trends seen in Bitcoin are markedly different from those in traditional financial markets:

  • Bitcoin’s strongest returns were recorded after holidays, with an average return of 0.9% and a median return of 0.41%.
  • In contrast, the average return during holidays was 0.77%, with a median of 0.33%.
  • The pre-holiday performance proved to be the weakest, with an average return of -0.14% and a median of 0.33%.

These figures incorporate all holidays, even those from smaller nations that are unlikely to strongly impact Bitcoin’s market liquidity. Given their lower GDP, fewer active traders and limited involvement in the global crypto ecosystem, their contribution to shaping market dynamics is minimal.

Targeting $1-Trillion GDP Countries

Moving forward, we zeroed in on markets that have a significant economic impact and demonstrate substantial involvement in the crypto space. This approach enabled for delivering an accurate analysis, showcasing the true dynamics of Bitcoin’s performance in leading global economies.

We drew on GDP data from the International Monetary Fund  and user numbers from Triple-A . The primary focus was on the economies with around $1 trillion in GDP and a minimum of 5% of the population engaging in crypto.

Our criteria included domestic stock market capitalization above $1 trillion. Exceptions were made for countries like Turkey and Russia, given their substantial crypto adoption rates and GDPs. This refinement reduced our focus from 94 countries to 25 key economies.

Interestingly, even after filtering out the smaller countries, the overall pattern remained largely unchanged. Of the 25 countries analyzed:

  • Six saw their best returns during the holiday.
  • Only one country showed its highest returns before the holiday.
  • Eighteen countries had the best returns post-holiday.

Country Pre-Holiday Return Holiday Return Post-Holiday Return
Worldwide (94 countries) -0.14% 0.77% 0.90%
Australia -0.66% 0.25% 0.38%
Brazil -0.08% 0.48% 1.03%
Canada -0.43% 0.04% 0.69%
China -0.47% 1.14% 0.61%
France -0.78% 0.27% 0.66%
Germany -0.80% 0.16% 0.73%
Hong Kong -0.71% 0.64% 0.63%
India -0.11% 0.53% 0.38%
Indonesia -0.32% -0.38% -0.30%
Ireland -0.51% -0.16% 0.34%
Italy -0.78% 0.24% 0.65%
Japan -0.06% 1.25% 1.30%
Mexico -0.53% 0.54% -0.21%
Netherlands -0.78% 0.27% 0.32%
Russia 0.09% -0.31% 1.33%
Saudi Arabia 0.73% -1.82% -1.34%
South Korea -0.20% 0.32% 0.53%
Spain -0.91% 0.39% 0.48%
Sweden -0.87% 0.75% 0.48%
Switzerland -0.75% -0.12% 0.81%
Taiwan -0.87% 1.56% 1.69%
Türkiye 0.19% -1.22% 0.20%
UAE -0.04% -0.80% 0.27%
UK -1.02% 0.47% 0.62%
USA -0.28% 0.50% 0.25%

After narrowing our focus to major economies, the figures showed:

  • An average return of -0.18% before the holiday;
  • 0.76% during the holiday;
  • 0.59% after the holiday.
Region Pre-Holiday Return Holiday Return Post-Holiday Return
25 Major Economies -0.18% 0.76% 0.59%
North America -0.53% 0.58% -0.07%
Europe -0.58% 0.49% 0.45%
Asia -0.34% 0.96% 0.88%
Middle East 0.33% -0.69% -0.18%

In terms of median returns:

  • 13 countries recorded the highest returns during the holiday;
  • 11 countries—post-holiday;
  • Only one country—pre-holiday.

Country Pre-Holiday Return Holiday Return Post-Holiday Return
Worldwide (94 countries) 0.33% 0.33% 0.41%
Australia -0.26% 0.20% 0.13%
Brazil -0.16% 0.23% 0.34%
Canada -0.34% 0.01% 0.44%
China -0.27% 0.51% 0.62%
France -0.39% 0.22% -0.05%
Germany -0.41% 0.02% -0.02%
Hong Kong -0.39% 0.19% 0.14%
India -0.16% 0.27% 0.22%
Indonesia -0.10% 0.00% 0.05%
Ireland -0.30% 0.17% -0.09%
Italy -0.41% 0.07% -0.02%
Japan -0.15% 0.42% 0.70%
Mexico -0.27% 0.20% 0.14%
Netherlands -0.39% 0.22% -0.05%
Russia 0.15% 0.25% 0.50%
Saudi Arabia 0.25% -1.42% -0.29%
South Korea -0.18% 0.15% 0.23%
Spain -0.46% 0.22% -0.03%
Sweden -0.51% 0.40% 0.11%
Switzerland -0.48% 0.00% 0.06%
Taiwan -0.33% 0.68% 0.88%
Türkiye -0.09% -0.29% 0.19%
UAE -0.19% -0.36% 0.19%
UK -0.51% 0.17% -0.02%
USA -0.42% 0.61% 0.19%

Median returns for major economies:

  • -0.14% pre-holiday;
  • 0.25% during the holiday;
  • 0.36% post-holiday.
Region Pre-Holiday Return Holiday Return Post-Holiday Return
25 Major Economies -0.14% 0.25% 0.36%
North America -0.41% 0.36% 0.08%
Europe -0.34% 0.24% 0.06%
Asia -0.20% 0.39% 0.41%
Middle East 0.06% -0.36% 0.20%

Regional analysis of the data

Taking a closer look at the data on a regional basis, the analysis showed varying results across different areas.

In North America and Europe, holidays brought the highest average returns, with North America at 0.58% and Europe at 0.49%. Median returns mirrored this trend, showing 0.36% in North America and 0.24% in Europe.

In contrast, Asia and the Middle East posted the strongest median returns after the holiday, with Asia at 0.41% and the Middle East at 0.20%. However, their average returns diverged: Asia excelled during the holiday, while the Middle East peaked pre-holiday.

What Can Be Taken Away From These Numbers

Bitcoin’s behavior is notably different from traditional stock market holiday patterns. Stocks typically experience pre-holiday rallies, but BTC doesn’t follow this trend. Instead, it tends to perform better during or after the holiday period.

One possible explanation is that Bitcoin, being traded around the clock, doesn’t undergo the same liquidity fluctuations that traditional markets experience when exchanges close.

Moreover, Bitcoin’s status as a global asset means that holiday-related downtimes in any single country have a reduced impact on its market, unlike stocks that rely on exchanges with limited trading hours.

Another possible factor is that liquidity from traditional financial markets might temporarily flow into the crypto markets during holidays.

When traditional assets aren’t an option, investors might look to Bitcoin and other cryptocurrencies as alternatives, which can boost activity and support Bitcoin’s price during or after holidays.

Another point to consider: The data revealed poor performance for BTC before holidays in almost every country analyzed.

This could be due to holidays in traditional markets draining liquidity from Bitcoin, as major traders frequently pull out funds to reallocate or take a break from trading until after the holiday. With reduced liquidity and fewer active traders, Bitcoin experiences increased vulnerability to stagnation or minor declines.

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