Santa hat



A Santa hat is an item of clothing that was the last tradeable holiday drop, as part of the 2002 Christmas event. They were dropped only on 25 December 2002. That day the holiday items appeared randomly on the ground all over RuneScape, in batches about every six minutes, during which a player could pick up as many as he/she wanted.

Although Jagex at the time described the hats as "just a bit of fun", they have since become an expensive and much-coveted item amongst players.

All players can wear a Santa hat on their head; they do not provide any additional bonuses in the main game, though they do give +3 Magic on RuneScape Classic.



Market History
Players were buying and selling Santa hats for only about 30,000 coins on the day they were dropped. Like other tradeable holiday drops, their value has since climbed into the millions.

Santa hats were selling for around 500,000 in December 2003. The price then rose to about 20 million to 24 million by 2007. Then, following the duel arena, wilderness, and trading changes in November and December 2007 and January 2008, the price fell to a low of 11.2 million coins.

During 2008, the price rose to about 15 million by the summer, and to 18 million by December; there may have been possible speculation due to the known release of the Santa suit (which did not include a hat) in December 2008, but factors remain unknown. A few days before Christmas 2008 the price of the Santa hat crashed. It reached a low of 12-13 million in February and March 2009.

Since March 2009, the price of Santa hats has risen greatly, although not continuously. By January 2010, the price of Santa hats reached 34 million coins.

In February 2010, a major rise in the price of Santa hats had begun, rising from 34 million to 65 million coins by the end of the month. After that, they crashed to 51 million coins, then stabilized at around 55 million coins for the rest of March and first week of April 2010. During the second week of April and afterward, Santa hats increased in price, reaching a value of 65 million coins by the end of August.

On 24 May 2010, the Santa hat hit the 100 million mark.

Many have theorized about the rise in Santa hat prices from 30 million to 100 million coins. Possible factors include the buyout of masks at the Grand Exchange, the mint cake crash and its effects on the economy, and/or price manipulation by clans that hoard the rare items; however, the exact cause is still unclear.

When the Santa hat reached a record price of 120 million coins on 2 June 2010, investors had begun to sell their Santa hats, resulting in falling prices. Runescape bloggers, investors, and speculators currently believe that Santa Hats are overvalued due to their recent run on prices, over-supply in the Grand Exchange, and low demand. Some claim that the intrinsic value of the Santa Hat may be only 50-62% of its June 2nd, 2010 price. Many long-term investors have now withdrawn from this volatile holiday item and have begun looking toward more stable, high net-worth rare items such as Halloween masks, Easter eggs, Party Hats, etc. The financial outlook of Santa hats still remains bearish, and a price bottom is still uncertain, given the lack of investment confidence.

As of July 2nd, 2010, the Santa hat has continued its negative derivative price-growth rate, amidst an overall economic inflation throughout Runescape. Current (possible) factors may include deflation, a market-correcting price bubble, and/or poor demand, but, as with all speculative investments, the Santa hat's price will remain volatile, and the true cause is indeterminate. What is known, however, is that the Santa hat market is overvalued based on the over-saturation of the items in the Grand Exchange, with little, if any, consumer demand to offset the enormous supply. Prices have trickled closer toward their intrinsic book values of 60-74 million coins, though many other factors apply.

Trivia

 * As an old practical joke, players would leave a ball of wool or ashes and red bead on the ground waiting for other players to come across and pick it up. When together, the ball of wool or ashes and red bead look very similar to a dropped Santa hat.
 * The item Fez looks very similar in appearance to the Santa hat, and some players used to emulate a Santa hat by equipping it as an extremely cheap alternative.