Uptober's Hidden Flaws: A Closer Look at Crypto's Seasonal Patterns

The concept of 'Uptober' suggests that October is a reliably strong month for the cryptocurrency market, particularly for Bitcoin. However, a closer examination of the data reveals a more nuanced picture.

For Bitcoin, the claim that October is strong holds up to some extent, with seven out of nine years ending in the black. The median return for October is a respectable 10.9 percent. However, when looking at the full quarter, the picture changes. Only five out of nine years ended in the black, and the median return shrinks to 5.4 percent.

This is because November and December often undo the gains made in October. The average return for the full quarter is a misleading 44.7 percent, which is skewed by two exceptional years: 2017 and 2020. These years saw massive returns of 219.5 percent and 168.9 percent, respectively, due to halvings of the Bitcoin reward and strong inflows.

At Ethereum, the Uptober thesis is even weaker. Six out of nine Octobers ended in the black, but the median return is a mere 0.7 percent. Over the full quarter, the relationship reverses, with five out of nine years ending in the black, but a median return of 22.5 percent.

XRP, on the other hand, breaks the pattern entirely. Only three out of nine years ended in the black, and the median return is negative at -0.9 percent. Solana, with only five quarters of history, has a wildly swinging trajectory, with a maximum return of 376.1 percent and a minimum of -70.0 percent.

The most recent completed fourth quarter ran against the thesis at all four coins, with Bitcoin, Ethereum, Solana, and XRP all ending the quarter in the red. This does not refute the seasonality, but it does place it in context.