Here's What History Says to Expect for Bitcoin in December

Bitcoin (CRYPTO: BTC) may be down more than 30% from its all-time high of $126,000 in early October, but there's no reason for crypto investors to panic. At least, not yet.

That's because Q4 has historically been the best quarter of the year for Bitcoin.

If history is any guide...

According to data from CoinGlass, Q4 is typically when Bitcoin turns in its greatest gains. The average return for Bitcoin in Q4 is a whopping 77%. During the past 15 years, there have been some blockbuster quarters. In 2013, for example, Bitcoin skyrocketed by 480% in the final quarter of the year.

Image source: Getty Images.

Bitcoin has been no slouch in recent years, either. In 2024, Bitcoin gained 48% in the final quarter of the year. In 2023, Bitcoin gained 57% in the final quarter of the year. That's why Bitcoin's lackluster performance in October, November, and early December has been so startling -- it's now down more than 20% for the quarter.

While Q4 has been bullish overall, December has not been the greatest month for Bitcoin. During the past decade, Bitcoin has gained an average of just 4.6% in the month of December. Last year, when Bitcoin was in the midst of an epic post-election rally, it actually fell 3% in December. The last time Bitcoin had a December to remember was back in 2020, when Bitcoin surged 47% in the final month of the year.

Putting it all together, the historical data suggests that something is somehow off for Bitcoin this year. It failed to appreciate in price in October and November -- the two months of the years when it has historically seen its greatest gains. And it has fallen this month as well, at exactly the time when it should be wrapping up a blowout quarter.

Is Wall Street right about Bitcoin?

Still, plenty of Wall Street analysts and market strategists remain upbeat about Bitcoin's prospects heading into 2026. In early December, Coinbase Global (NASDAQ: COIN) outlined a bullish outlook for Bitcoin, based on its view of broader macroeconomic trends.

According to Coinbase, global liquidity is on the rise, and that has typically been a strong driver of higher crypto prices. Moreover, there is an improving macroeconomic outlook for the U.S. economy, primarily driven by growing optimism about future Federal Reserve rate cuts. Combined, these factors should lead to stronger economic tailwinds for Bitcoin.

And Coinbase is hardly alone in offering an upbeat outlook for Bitcoin. JPMorgan Chase (NYSE: JPM) recently reiterated its bullish $170,000 price target for Bitcoin in 2026. Persistent buying from large institutional investors, the thinking goes, should be enough to prop up Bitcoin in 2026. If all goes according to plan, says Tom Lee of Fundstrat, Bitcoin could be rocketing to a price of $250,000 by early 2026.

The "old" Bitcoin vs. the "new" Bitcoin

Within the crypto community, there is a debate about the new pro-crypto policies of the Trump administration, and how they may have fundamentally altered the price behavior of Bitcoin going forward.

Simply stated, Bitcoin doesn't seem to be behaving the way it should this year. How else to explain the fact that Bitcoin is now down 9% for the year? At the beginning of the year, the thinking was that Bitcoin would double in value, to hit a price of $200,000. Today, it's hovering at less than $90,000

The "old" Bitcoin was highly volatile and prone to intense cycles of boom and bust. The price of "old" Bitcoin was primarily driven by retail investors, given that Wall Street largely ignored it. And that meant Bitcoin was highly uncorrelated with any asset class. It could zig when other asset classes zagged, and that's what made it so special.

The "new" Bitcoin is less volatile. The old cycle of boom and bust has been replaced by a much smoother cycle of price increases. Instead of speculative buying by retail investors, sustained buying from institutional investors is now driving the price of Bitcoin. And Bitcoin, once uncorrelated with any major asset class, is now starting to behave more like a tech stock.

It's up to you to decide whether we'll see the "old" Bitcoin or the "new" Bitcoin in 2026. If we see the "old" Bitcoin, then the price of this highly volatile asset could collapse, just as it did in 2022, 2018, and 2014. If we see the "new" Bitcoin, then it may be able to shake off its current malaise, soar in value in early 2026, and restore the faith of crypto investors everywhere.

Investors need to pay attention to what happens to Bitcoin this month. If Bitcoin doesn't rally as expected, then it could be time to scale back price targets for 2026. But if Bitcoin does start to rebound, then this might be a fantastic time to pick up the world's most popular cryptocurrency at a steep 30% discount.

JPMorgan Chase is an advertising partner of Motley Fool Money. Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and JPMorgan Chase. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.