Author: Suvashree Ghosh, Sidhartha Shukla, Bloomberg; Translated by: Tao Zhu, Golden Finance
Bitcoin is on track for one of its biggest gains in September as a wave of global rate cuts led by the Federal Reserve helps the largest digital asset escape its seasonal doom and gloom.
Bitcoin has risen more than 10% this month, compared with an average 5.9% drop in September over the past decade, according to data compiled by Bloomberg. An index of smaller currencies rose more than 20%, a sign that looser financial conditions are invigorating riskier parts of the cryptocurrency market.
The Federal Reserve, the European Central Bank and the People’s Bank of China all cut borrowing costs in September to support economic growth. Investors responded to easier monetary conditions by buying everything from stocks to gold in anticipation of further stimulus.
Bitcoin is having one of its best Septembers ever
“Bitcoin remains most highly correlated to monetary policy in terms of the Fed,” said Sean McNulty, head of trading at liquidity provider Arbelos Markets. “Easy policies from other central banks certainly help as well.”
The cryptocurrency rose 1.2% on Friday to trade at $65,334 as of 1:12 p.m. in Singapore. Bitcoin prices have risen 56% in 2024, driven by inflows into U.S. bitcoin exchange-traded funds, but are below the record of $73,798 set in March.
Caroline Mauron, co-founder of Orbit Markets, a provider of liquidity for digital asset derivatives trading, said the $65,000 level could “hold strong” for a few hours due to the expiration of a large number of options contracts on Friday.
According to a report from cryptocurrency exchange Kraken, Bitcoin’s failure to “decisively” break above $65,000 could signal a period of weakness for the coin.
In addition to monetary policy, the digital asset industry is also awaiting the results of the U.S. presidential election. Many executives expect clarity on U.S. cryptocurrency regulation to boost market sentiment in the months following the vote.
