Here's What Could Happen With Ethereum in December

Right now, holders of Ethereum (CRYPTO: ETH) are likely wondering whether to brace for further pain or expect a rebound this winter. As of this writing, the coin is down roughly 25% over the past 30 days and 12% this year.

Do things tend to get worse in December with this asset? Let's examine what its history reveals.

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The data doesn't look great here

December has traditionally not been one of Ethereum's strongest months. Since 2016, the coin finished December higher than it started in only four of nine years, and it has closed in the red in the other five. The average December return over that period is 7%, which is hardly a Santa rally to celebrate; the median performance was a decline of around 6%. In other words, December has historically been a coin toss with a slight lean toward disappointment.

The pattern becomes more interesting when you consider November and December together. Between 2016 and 2024, when November was a down month for Ethereum, December was also a down month three times. The lone exception was 2018, when Ethereum rebounded in December after an especially brutal November crash. That means that historically, a red November has often bled into the end of the year.

So if you take these numbers at face value, the odds of a cheerful December after a weak November are not great. What's more, those odds are probably even weaker this time around due to the crypto market's ongoing weakness in the aftermath of the Oct. 10 flash crash. Bitcoin and nearly all altcoins have steadily declined since then.

The plan doesn't need to be complicated here

Now that you're up to speed about how Ethereum has historically performed in December, let's take a look at what tends to happen after that month.

The first thing to appreciate is that seasonality statistics built entirely on what's essentially just nine data points (one for each year since Ethereum's launch) are bound to have pretty low predictive power. Crypto has undergone significant changes since 2016. And where its December performance has historically been a mixed bag, the start of the year has been the opposite, as it's where Ethereum's seasonality actually looks powerfully positive.

Ethereum's strongest average returns typically come in the first and second quarters of the year. Its peak average quarterly returns are in Q1, at about 77%, and in Q2, at about 64%. There's reason to believe that trend could still have gas left in the tank.

Specifically, Ethereum remains the top fee-earning blockchain, having generated approximately $2.5 billion in gas fees in 2024. The more people and applications use the network, the greater the demand for the asset that powers it. And since it's the home of decentralized finance (DeFi) and the crypto sector's single-biggest home for stablecoin and tokenized real-world asset (RWA) value, the chances are very good that there will be ongoing demand for Ether from here on out.

In a nutshell, that's why a weak November and a historically shaky December can actually be a gift to investors. If you are adding a fixed amount to your position whenever sentiment is low and headlines are consistently pessimistic (as they are now), you're aligning your investments with the historical pattern without trying to time the market. Buying over time also means that you're insulating yourself from the temptation to chase a January spike if it arrives faster than you expected.

Use all of this knowledge to be psychologically prepared for more volatility now while keeping your focus on a multiyear investment thesis rather than a single month on the chart. Next month might be challenging, but if you plan ahead, it can set you up for future financial success.

Alex Carchidi has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.