Compass Investments

– Bitcoin fell about 5% in December and ended 2024 on a downward trajectory, despite MicroStrategy’s large weekly purchases.

As investors move into 2025, historical market data shows that January could be an important month for bitcoin and other cryptocurrencies. According to data compiled by

Coinglass, bitcoin has historically performed very strongly in the first quarter, with its price rising an average of 3.35% in January and nearly 57% in the first quarter over the same period since 2013.

However, bitcoin is not the only currency that is ending the year on a down note: since the Federal Reserve last met in mid-December, the Nasdaq 100 Index has fallen about 5% . Bitcoin has lost about 15% of its value over the same period.

But as Fundstrat’s Tom Lee recently pointed out, a weak stock market at the end of the year doesn’t necessarily mean a bearish start to next year. In fact, the data suggests the opposite.

In years where the market was weak in December, January is usually a rebound month. Last week, only 18% of stocks rose on the New York Stock Exchange, the lowest three-day gain in 65 years. As Lee notes, the 12 stocks with the worst market breadth since 1962 ended the year returning an average of about 5% of their gains after January’s performance, a 75% gain.

In this case, weakness through the end of 2024 could mean strength for stocks and, by extension, bitcoin in the new year. It could mean that.