Chinese New Year Bitcoin Trade Is Guaranteed Profit, Researchers Say

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Does an aver­age 9% return on invest­ment sound attractive?

As it turns out, this is exact­ly what the Chi­nese New Year has had in store for Bit­coin investors for the past eight years, accord­ing to a new report by dig­i­tal assets finan­cial ser­vices plat­form Matrixport.

“Buy­ing Bit­coin at the end of the first day of Chi­nese New Year and sell­ing it 10 trad­ing days lat­er would have returned +9%, on aver­age, with all of the last eight years (2015–2022) show­ing pos­i­tive returns,” Markus Thie­len, head of research at Matrix­port, wrote in a note.

Accord­ing to Thie­len, this means—if his­to­ry is any­thing to go by—investors that bought Bit­coin on Sun­day, Jan­u­ary 22, and exit the posi­tion next Wednes­day, Feb­ru­ary 1, could leave the trade with a 9% profit.

“Chi­na has been a major influ­ence on Bit­coin for many years,” Thie­len told Decrypt. “When peo­ple get togeth­er, they talk.”

Bit­coin Lunar New Year his­tor­i­cal gains 2015–2022. Source: Matrixport.

As the chart above shows, the ten-day trad­ing peri­od after the Lunar New Year of 2017 was the most prof­itable in the past eight years, boast­ing 15% gains over the fes­tive peri­od, fol­lowed by 14% in 2021 and 13% in 2016.

“The accu­mu­lat­ed aver­age Bit­coin return for the ide­al tim­ing is around 15–19 days, as prices tend­ed to ral­ly by +12% when bought on the first day of the Chi­nese New Year and they peaked out around day 15–19,” added Thielen.

Bitcoin’s bullish new year

After the tur­moil the cryp­to mar­kets expe­ri­enced in 2022, Bit­coin has defied the odds so far in Jan­u­ary, with the price of the world’s largest cryp­tocur­ren­cy soar­ing about 38% since the begin­ning of the year.

Trad­ing at $16,520 on Jan­u­ary 1, BTC hit $23,282 on Sat­ur­day and is cur­rent­ly chang­ing hands around $22,900, accord­ing to CoinGecko.

Should the pat­tern out­lined by the Matrix­port researcher con­tin­ue, this would mean that—based on the 24-hour high of $22,948—by Feb­ru­ary 1 the price of Bit­coin could sur­pass $25,000.

Whether this sce­nario plays out in real­i­ty, remains to be seen, how­ev­er, some experts, when speak­ing of the cur­rent ral­ly, have already warned of a pos­si­ble bull trap that could lure inex­pe­ri­enced traders.

The lat­est Coin­Shares report has mean­while depict­ed quite a cau­tious approach investors showed last week towards Bit­coin invest­ment prod­ucts, with short posi­tions dom­i­nat­ing U.S. fund inflows by a large margin.

Dis­claimer

The views and opin­ions expressed by the author are for infor­ma­tion­al pur­pos­es only and do not con­sti­tute finan­cial, invest­ment, or oth­er advice.

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