While the S&P 500 and gold hit record highs indicative of the Santa Claus rally, crypto traders face a harsh reality.
As we approach Christmas, the crypto community is still awaiting a Santa Claus rally.
A widely believed phenomenon in traditional stock and commodity markets, a Santa Claus rally is a calendar effect.
It involves asset prices rising during the last five trading days in December around Christmas and the first two trading days in the following January.
If we look at the traditional markets, it looks like the Santa rally is on the way.
Spot gold hit a new record high of $4,525.18 per ounce and the S&P 500 also posted a record high of 6,921.42 on Dec. 24. So, both stock and commodity benchmarks lie in the green zone ahead of Christmas.
The Santa rally, driven by year-end optimism and portfolio rebalancing, is generally anticipated in the digital assets market also.
Bitcoin (BTC), the benchmark asset of the crypto market, has a contested legacy as far as the Santa rally is concerned.
While BTC has generated returns as high as 33% and 46% during the Christmas-New Year period in 2011 and 2016, it posted declines of 14% and 10% in 2014 and 2021.
Overall, BTC has averaged 7.9% during the Santa period since 2011.
But 2025 has been a rather volatile year. While Bitcoin hit a new record high north of $126,000 in early October, the crypto crash beginning a few days later has turned out to be a long affair.
At press time, Bitcoin is trading at $86,852.02, more than 30% lower than its all-time high (ATH).
Every asset except crypto gets Santa Claus rally in 2025
Popular trader Steve Burns posted a rather amusing remark on X about the anticipation within the crypto community, "Santa Claus rally in Bitcoin is going in the wrong direction."
A popular analyst's response encapsulated the cynicism and disappointment felt by the crypto community.
Konstantin Vasilenko, co-founder at the Paybis crypto exchange, told TheStreet Roundtable that he didn't expect any Santa rally.
Traders in some regions spend crypto and exit some risky positions before New Year due to tax reasons, so he didn't expect any major moves before January.
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