Bitcoin’s value failed to rise this Christmas, defying analysts’ expectations. This is surprising considering the positive sentiment traditionally associated with Christmas, a time when families gather and there is typically a festive mood in the stock and currency markets. One might have expected a Bitcoin bull run during this period.
Normally, stocks undergo a “Santa Claus” rally during the Christmas season. It should span the last week of December and the first few days of January. Several complex factors contribute to this phenomenon, including year-end tax considerations, holiday optimism, and the release of year-end reports. However, it’s important to note that such a rally is not guaranteed every year, as the impact of these factors varies annually.
In contrast to expectations, Bitcoin’s price actually declined on Christmas day. It settled at around $43,161 with a 1.2% reduction, as investors sold Bitcoin. This highlights the unexpected absence of a Bitcoin bull run. Investors are now concerned about the potential for significant volatility in the digital currency market. The cryptocurrency market typically performs well during this period, making Bitcoin’s decline somewhat surprising.
Nevertheless, this may not be cause for alarm. There remains the possibility of a Bitcoin bull run in the weeks ahead, primarily driven by the anticipation of an upcoming Bitcoin ETF. If the ETF gains approval, it would be a major boost for the cryptocurrency. Investment firms such as Grayscale, Ark, and BlackRock are heavily investing in Bitcoin and are in discussions with the SEC to secure approval for the ETF, which would further boost investor confidence.
Should the ETF receive approval, it could trigger an immediate resurgence in Bitcoin’s value, potentially reaching historic highs.
