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As the holiday season approaches, investors are left wondering whether there will be a Santa Claus rally in both tech stocks and cryptocurrencies. Given the recent market downturns, it’s essential to examine the historical trends of both markets during this period.
In recent years, high-tech stocks have been hesitant since the most recent Fed rate cut and deflated in trading this week. Despite this dip, there is still a chance for a Santa Claus rally ahead? In order to answer this question, let us look at some historical data.
Historically, U.S. stocks have exhibited a Santa Claus rally in 79% of years since 1950, with an average gain of around 1.3%. However, it’s crucial to note that NASDAQ gains and losses tend to be higher than the overall US stock market due to its nature as a tech-heavy index.
In contrast, cryptocurrencies like Bitcoin have also historically experienced a Santa Claus pump around the holidays. In fact, this bump is often more pronounced in crypto markets compared to stocks. However, it’s essential for investors to keep in mind that there may be losses during this period, which can be quite substantial.
To illustrate this point, last year saw a 4.87% rise in Bitcoin’s price during the holiday season, while the NASDAQ Composite increased by only 0.46%. This disparity is even more striking when considering the previous year’s results, as Bitcoin dropped by -6.8%, far surpassing the NASDAQ’s loss of -0.59%.
It becomes clear that both tech stocks and cryptocurrencies have been experiencing a robust rally in recent times. If this trend continues, it appears that investors can expect to see even greater gains over the long-term for these assets.
For those who are unsure about what investments to make during the last few days of December and the first couple of January, there is one thing that holds true: Bitcoin tends to go further than other markets.
Source: cryptopotato.com
