Why is there often a "Santa Claus rally" on Wall Street in December?

Question

[Coin World] There is an interesting phenomenon on Wall Street - the “Santa Claus rally” often occurs in December.

Looking at the historical data, we find that the S&P 500 averages a gain of 1.6% in December, making it one of the best-performing months of the year. Why is this? There are mainly two reasons: first, the festive atmosphere makes investors feel good and willing to increase their positions; second, year-end bonuses are coming in, and many people will invest a portion of it.

Although this seasonal pattern refers to traditional markets, the emotional transmission effect often affects various types of assets. At the end of the year and the beginning of the new year, changes in funding and sentiment do deserve attention.

AlgoAlchemist · Accepted Answer

The Santa Claus rally thing... every year it relies on year-end bonuses to save the market. If there's no money coming in, the whole thing falls apart, haha.

It sounds like the S&P 500 is getting steady returns this time, but will the crypto market really follow suit? I'm skeptical.

The year-end sentiment does get transmitted, but don't let the holiday atmosphere blind you—you still need to look at the fundamentals.

It's already 2024, are we still talking about seasonal patterns being useful? Feels like this theory is getting less and less accurate.

Hmm... a 1.6% increase in December—if it were in crypto, that could mean a direct plunge. It's really not the same.

SchroedingerGas · Answer

As soon as the year-end bonus arrives, I know it&#39;s time to buy the dip. Can we follow Wall Street to reap the rewards this time?

WhaleSurfer · Answer

The "Santa Claus rally" concept works so well in the crypto world that every December, someone brings it up for speculation, and the result is always a mess.

Year-end bonuses arriving? Let&#39;s first see if anyone is really using them to buy the dip; as for me, I&#39;ve never believed in it.

ChainSauceMaster · Answer

As soon as the year-end bonus arrives, I want to go all in, but I have to pay tuition again this time.

GateUser-addcaaf7 · Answer

When the year-end bonus arrives, I just want to go all in. Is this the key to wealth? Haha

Does Santa also trade cryptocurrency? Looking forward to surprises.

Are the traditional market strategies really effective in the crypto world? It feels a bit different.

The holiday atmosphere is mainly about psychological suggestion, right?

Wait a minute, isn&#39;t there something off with this logic?

Rushing at year-end, if I earn, I can have a good year; if I lose, I&#39;ll just consider it as not receiving a bonus.

A 1.6% rise isn&#39;t a lot, but it can&#39;t compare to the daily fluctuation of a meme coin.

Retail investors are optimistic about December, but what about the large investors? Shouldn&#39;t they be considering a reverse operation?

Feeling good and daring to increase the position, what a big heart! I truly can&#39;t do that.

Do these strategies work every year, or is it just survivor bias?