It’s almost that time of the year again where people all over the world leave their work, school or other activities to meet with their friends and families after a long period of time. The thrill of adrenaline and adventure is something we all look forward to. Similarly, on the other side, in addition to looking forward to spending time with family and friends, investors in cryptocurrency, Bitcoin especially, are also expecting what they call the “holiday effect” on the price of Bitcoin. Over time, it has been noticed that during these holidays Bitcoin usually experiences a greatly significant increase in price.
In 2017, Bitcoin was only struggling between less than $1000 to $1100. Before the Thanksgiving holidays it rose to an all time high of $5,000 and then towards the end of the year, during the yuletide, Bitcoin more than tripled it’s price, reaching up to $20,000.
On the contrary, the game is different with the Chinese New Year holidays. During these periods markets are usually closed down for about two weeks and during the period, Bitcoin experiences a significant drop in price, becoming very volatile. An explanation for this may be that most crypro markets are located in China and since they would be closed for a long period of time, it may affect Bitcoins price.
Furthermore, in anticipation for the long holiday, most investors withdraw their money from their wallets to shop and spend during the break. This is another factor that contributes to the dip. Reports have shown that for the last four to five years consecutively, the percentage of dip experienced with Bitcoin and other Altcoins has increased overtime. The highest happening in 2019, where a 50% drop was recorded.
Having the appropriate information at hand, you can prepare before hand against these events in the next season by using reliable platforms like Bitcoin Up to invest. Start your investments now so that you can also have your experiences to share over dinner.
Would it be absolutely correct to say that these holidays are responsible for the rises and falls seen in Bitcoin or they are mere coincidences? In trying to explain this phenomenon, SFOX suggested that these hikes were as a result of the FOMO effect where friends and families get together to discuss experiences with Bitcoin, and indirectly increasing the number of people who would want to join the trade. Though this assumption is backed up with evidences of increased internet searches for Bitcoin around that time, in 2019, a more in-depth research proved otherwise.
The research showed that the hikes actually happen shortly before the holidays. Meaning that the FOMO effect cannot be the cause for it, because families have not yet come together to sit and discuss. This way, the cause for the spike during or close to these periods cannot really be understood.
However, the course has been consistent and has profited investors over time. One thing definitely holds, cryptocurrency does not depend on any regulatory authority neither does it take days off. This indicates that as an investor you are free to trade at any hour of the day or any day of the week as you please.
Conclusion
In preparation for the yuletide, we cannot categorically say that the price of Bitcoin would increase, however, we recommend that you look out for updates in prices on the news. This would keep you informed and let you make rational and informed choices. In addition, following history, this might be the right time for you to invest in Bitcoin and anticipate rise.
