Preheat oven to 350 F. Prepare cupcake pan with liners. Set aside.
In a large bowl whisk together butter, sugar, eggs, coconut horchata, and vanilla. Mix until mixture is a pale yellow. Sift flour and baking soda together. Add to wet mixture a 1/3 at a time, until fully incorporated.
Fill each cupcake well 2/3 full. Transfer pan to oven and bake for 20 minutes. Reduce oven temperature to 325 and bake for another 10 minutes.
Remove cupcakes from oven and transfer to cooling rack. Allow to cool completely.
Make the icing: Meanwhile, in a large bowl using a stand mixer or hand mixer, beat softened butter until light and fluffy.
Add powdered sugar, 1 cup at a time, beating buttercream back to fluffy before adding next cup. Add coconut horchata and beat well to incorporate.
Using a knife, small spatula or pastry bag fitted with a star tip, add about 2 tablespoons of coconut horchata buttercream to each cupcake and dust with cinnamon or yellow sugar.