These have been fabled ever since the 2016 Christmas Event when the useless Candy Cane Axe was added. The tree is a worth a little more then Lava Wood but is presumably harder to obtain, the only axe capable of chopping this tree is the candy cane axe and Fanon:Festival axe which could be obtained from completing Fanon:Santa's questline(Obviously).
The tree itself is actually cylindrical, with red and white stripes making up the bark. When milled the striped are said to "melt" into the wood underneath the bark, giving the plank it's pink hue.
You can only visit the Candy Cane Biome in December, to get there one must travel to the Winter Cabin located in the Taiga Biome during December the Snowglow Bin would be able to open again and you can jump in. After falling for a while you'll find yourself in the Candy Cane Biome where you'll find these tree's along with a portal to get out. Bringing a sled would be fun with all the icy slopes, but that's only optional.