Historically, crypto traders hate September.
“Since Bitcoin began trading in 2010, the asset has fallen 4.5% on average during September,” Matt Hougan, chief investment officer at crypto fund manager Bitwise, wrote in a blog on Monday.
Bitcoin is already down 4.3% this month, slightly lower than the negative 4.5% average performance for September with almost two-thirds of the month left to go.
However, market watchers are bullish that Bitcoin will pull itself out of its funk soon.
Rate cut size
The Federal Reserve is set to cut interest rates this month. Market participants expect the policy adjustment to stabilise consumer prices and manage inflation.
The Fed’s first rate cut in four years might constitute a return to an accommodative economic environment that spurs interest in risk-on assets such as crypto and tech stocks.
The question remains how big the rate cut will be. CME Group’s FedWatch tool put the chance of a 0.5% and a 0.25% rate cut at 17% and 83%, respectively. Those odds were 31% and 69% last week. The Fed is expected to act September 18.
“While there’s broad consensus that easier money is coming, investors are feverishly recalibrating their bets,” Hougan wrote.
White House race
The November US presidential election is also set to affect the price of Bitcoin, which is serving as a wild card that could lead to increased volatility.
“We’ll see the market struggle to find its footing until we have greater clarity over future leadership and policy,” Hougan wrote.
The crypto industry has poured hundreds of millions of dollars into lobbying for crypto-friendly laws.
That seems to have had an effect. Republican contender and former president Donald Trump has embraced the industry this election cycle. He has pledged to make America the world’s crypto capital if he is elected to the White House, and to fire crypto sceptic Securities and Exchange Chair Gary Gensler.
Democratic Vice President Kamala Harris has not made her views on crypto known. While the Biden administration is seen as unfriendly to crypto, her campaign has said that Harris wants to “reset” the party’s relationship with the asset.
Trump and Harris squared off in their first debate on Tuesday, but neither mentioned the topic.
The absence proved “that crypto is nowhere near as important to either presidential candidate as it is to us in the web3 world,” said Tim Kravchunovsky, founder and CEO of the decentralised telecommunications network Chirp.
Still, the uncertainty in the market is clouding trader sentiments and Bitcoin continues to whipsaw this month.
And that’s unusual for September, crypto analytics provider Kaiko wrote in a research note on Monday.
“Bitcoin’s 30-day volatility has spiked to 70%, nearly double last year’s levels and close to March’s peak when Bitcoin hit its all-time high,” Kaiko wrote.
On the plus side, a volatile Bitcoin market often signals increased market participation, the team said.
‘Uptober’ vibe
Crypto experts seem to be holding out for the fourth quarter, which has historically been Bitcoin’s best months.
“Bitcoin investors love October ― it’s nicknamed ‘Uptober after all, thanks to Bitcoin’s 30% average rise during the month,” Hougan wrote.
Crypto market movers
Bitcoin is marginally up 0.3% today, trading at $56,954.
Ether is down 0.1% in the last 24 hours, trading at $2,335.
What we are reading
Why crypto is so boring — and why a snoozy market is bullish for Bitcoin — DL News
Solo Bitcoin Miner Strikes Gold with $181K Block Reward — Milk Road
First Congressional Hearing on DeFi Highlights Divide Between Republicans and Democrats — Unchained
Indonesian Crypto Exchange Indodax Shuts Down Amid $22M Hack — Milk Road
Robinhood’s crypto push is paying off as American millennials get richer — DL News
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
