Bitcoin price continues to disappoint. Bitcoin is recorded to have weakened by 8.65% throughout August 2024 at the level of 58,978.6 to August 31, 2024. The sentiment of optimism about the United States (US) interest rate cut which will soon occur in September 2024, has encouraged investors to flee from crypto assets to equity assets such as stocks.

Negative sentiment on the crypto market came from external sources, especially after the United States Securities and Exchange Commission (SEC) charged two brothers who allegedly ran a US$60 million crypto Ponzi scheme with a non-existent crypto trading bot feature.

In a lawsuit filed Aug. 26 in the U.S. District Court for the Northern District of Georgia in Atlanta, the SEC claims Jonathan Adam and his brother, Tanner Adam, lured more than 80 people by claiming to operate a crypto bot that could provide investors with 13.5% monthly returns.

The SEC alleges that from January 2023 to June 2024, the brothers told investors that their bots could identify trading arbitrage opportunities on crypto platforms and could buy and sell assets simultaneously to take advantage of small price differences across markets.

Investor funds are promised to go into a loan pool to fund flash loans and settle trades, with assets borrowed and returned in the same blockchain transaction.

Justin Jeffries, associate director of enforcement at the SEC's Atlanta Regional Office, said the trading scheme was a complete scam and the bots do not exist.

In addition, the recent pressure on the crypto market has come from the flood of funds flowing out of US exchange-traded funds (Bitcoin Spot ETFs). According to Farside on August 27, 2024, a net outflow of US$127.1 million or around Rp1.97 trillion was monitored, led by ARK 21Shares' ARKB.

However, expectations of a US central bank (The Fed) interest rate cut have become a driver for risk assets such as crypto and Bitcoin to appreciate.

So far, market players have been expecting the Fed to cut interest rates at its meeting next month, regardless of whether it is by 25 or 50 basis points (bps).

This can be seen from the CME FedWatch Tool survey which shows that around 65.5% of market players project a 25 bps interest rate cut to 5.00-5.25%.

Historically, the Fed last cut interest rates twice in March 2020 or during the Covid-19 pandemic.

In early March 2020, the Fed lowered interest rates by 50 bps to 1.00-1.25% and in mid-March 2020, the Fed again cut its interest rates by 100 bps to 0.00-0.25%.

At the same time, Bitcoin weakened at the beginning of the rate cut and tended to rebound after the second rate cut.

Although rate cuts generally provide a breath of fresh air for risk assets including Bitcoin, historically, September has been a bad month for Bitcoin's performance.

Reported from Bitcoin Monthly Return, September was the worst month for Bitcoin's performance with a total decline of around 66% and an average monthly depreciation of 4.4%.

Amidst the probability of a decline in the price of Bitcoin in September this month, however, in the future Bitcoin is expected to tend to climb amidst its increasing acceptance in various countries to the point of scarcity or scarcity of Bitcoin in the future.#TipsTradingFutures #CryptoExplorerFiesta #Binance $BTC