Analysts noted that Trump's "tariff dividends" and ultra-long mortgages are being perceived as new liquidity easing measures, which could lead the cryptocurrency market back to the same trajectory as in December of last year!
$Bitcoin (BTC.CC)$ The weak performance in October may be setting the stage for a year-end rebound — a phenomenon known as the 'Santa Claus Rally,' which has historically boosted the cryptocurrency market in December.
Data from Coinglass shows that in six of the past eight years, Bitcoin ended December with gains ranging from 8% to 46%, indicating consistent seasonal tailwinds for the world's largest digital asset.
Nick Ruck, Director of LVRG Research, stated in a Telegram message: 'We are observing a shift from panic selling to strategic accumulation by long-term holders… This recovery trajectory, supported by anticipated Federal Reserve rate cuts and institutional adoption, positions the market for a robust 'Santa Claus Rally.''
The 'Santa Claus Rally' refers to a phenomenon where traders prepare for year-end optimism and reduced holiday trading amplifies price volatility, leading to a tendency for Bitcoin to rise in December. Historically, it has often resulted in monthly gains, sometimes recording strong double-digit increases.
This pattern reflects the seasonal rhythm of the market, where prices follow cyclical calendar trends driven by investor psychology, tax planning, and portfolio adjustments. In the cryptocurrency space, it typically marks a shift from profit-taking to renewed accumulation, as traders begin looking ahead to the new year and set the tone for risk appetite and liquidity in the broader digital asset market.
Tariff Dividends and New Liquidity
Analysts noted that former U.S. President Trump proposed distributing $2,000 stimulus checks based on 'tariff dividends,' with some observers suggesting this could evoke memories of the pandemic-era rally.
Augustine Fan, Head of Insights at SignalPlus, stated: 'President Trump has proposed a new form of stimulus check, directly distributing $2,000 as a 'tariff dividend' to the American public, alongside a new 50-year mortgage initiative aimed at improving housing affordability.'
Augustine added, “The ‘tariff dividend’ evokes memories of the stimulus checks distributed during the pandemic—a direct and effective form of monetary stimulus—while ultra-long mortgages will improve housing affordability while adding extra capital leverage to the system.”
Augustine explained that both measures should be viewed as new forms of liquidity easing, which generally have a positive impact on risk assets, and so far, the market has treated them accordingly.
A new volatility regime
Some believe that Bitcoin may be entering a new phase of volatility—one no longer driven by speculative meme coin frenzies or retail trading mania, but rather propelled by deeper structural changes in liquidity and leverage.
Rachel Lin, CEO and co-founder of SynFutures, stated in an email: “Bitcoin’s volatility through 2026 is likely to remain structurally elevated, albeit for different reasons than in previous cycles.” She said: “What we are seeing now is the maturation of Bitcoin’s volatility. It’s less about speculative hype and more about how institutional flows, liquidity conditions, and derivative positions interact within a tighter global financial framework.”
Rachel added: “From a macro perspective, two variables to watch are global liquidity and real interest rates. Bitcoin has historically shown a correlation of 0.6 to 0.7 with U.S. liquidity indicators (such as the Federal Reserve’s balance sheet and M2 growth), suggesting that if global central banks pause or re-tighten easing in 2026 (driven by tariff-induced inflation—a scenario flagged by the IMF and BIS), price volatility could quickly resurface.”
The market landscape in 2025 looks similar. After experiencing a volatile October, Bitcoin has fallen approximately 3% so far in November, but on-chain data shows that smaller holders are accumulating while large wallets remain on the sidelines.
Whales holding over 10,000 Bitcoins have been net sellers for three consecutive months, gradually unwinding positions they built up during the first quarter’s ETF inflows. Meanwhile, smaller investors holding less than 1,000 Bitcoins have quietly been increasing their holdings, offsetting some of the selling pressure.
If historical seasonal patterns hold and Trump’s proposed $2,000 tariff dividend provides another potential liquidity boost, the cryptocurrency market may once again follow the same trajectory seen in December of last year: evolving from quiet skepticism to eventually giving way to year-end euphoria.
Editor/KOKO
