A chart included in SFOX’s research note shows bitcoin’s sharp price rise after Thanksgiving in 2017.
A new research note from crypto prime dealer SFOX indicates there may be a correlation between the bitcoin price and holidays, at least during pronounced bull runs. The note from the SFOX research team points to 2017’s massive rally in the crypto asset market around Thanksgiving and Christmas in the United States and a more recent price increase during China’s Spring Festival this year as two examples of this phenomenon.
According to the research note, the main theory behind the reasoning for the holidays’ effect on the bitcoin price has to do with FOMO (fear of missing out).
“Part of the narrative surrounding this unprecedented bull run [in late 2017] was that many people were hearing about Bitcoin for the first time: over Thanksgiving dinner, the story goes, Luddites in the family would ask the more tech-savvy among them about this ‘Bitcoin’ they’d seen in mainstream news — and how could they purchase some ‘Bitcoin coins’ for themselves?” says the note.
Bitcoin Price FOMO in Late 2017 and Early 2019
During the time from November 12, 2017 to December 17, 2017, the bitcoin price increased from $6,030.53 to $19,205.93. The vast majority of this growth in the bitcoin price came after the Thanksgiving holiday. Brief recoveries in the bitcoin price were also seen in the days after Christmas and New Year’s Eve.
As a recent report from Delphi Digital pointed out, this sort of theoretical retail investment interest is still the main driver of the bitcoin price in 2019. Notably, Delphi Digital also released a bullish report regarding the bitcoin price prior to this most recent bull run.
The research note from SFOX also points out that a sustained rise in the bitcoin price occurred during the Spring Festival celebrated in China back in February of this year. During this time, the bitcoin price rose 14% from $3,419.17 to $3,908.97. The price then continued to rise over the $4,000 mark before settling back down to the $3,750 range in the days after the holiday season.
SFOX’s research team also notes that these rises in the bitcoin price coincided with increased search volume for “bitcoin” on Google.
The research note adds that there isn’t a large amount of data to go on in terms of how holidays affect the bitcoin price due to the fact that late 2017 was the first time the asset had become sufficiently relevant enough to cause discussions to take place around the topic between friends and family members over the holidays. That said, the note also adds, “The data we’ve seen seem to reinforce general perception: at times when the market is already doing well or improving, holidays have the potential to drive renewed retail interest in buying bitcoin and other cryptocurrencies. That behavior, almost by definition, is FOMO[.]”
If bitcoin’s bull run continues into the holiday season in the United States later this year, it’s possible the FOMO seen in late 2017 could return and take the digital asset to a new all-time high. Of course, it’s also possible bitcoin’s current bull run comes to an end or reverses before then.
In terms of what’s been pushing the bitcoin price around lately, theories range from the release of the white paper for Facebook’s Libra cryptocurrency to the normal activity of a store of value asset. Some bitcoin critics have also claimed that the entire market is being manipulated by the Tether stablecoin — a claim that was recently disputed by Kraken CEO Jesse Powell.
Additionally, another crypto asset has increased in price by more than 800% this year as all eyes have been on bitcoin.