Original title: Top 6 Reasons to Stay in Bitcoin and Crypto Market
Original author: Rada Mateescu
Original source: https://crypto.ro/
Compiled by: Mars Finance, Daisy
While September is typically a poor month for Bitcoin, in 2024, things changed and we saw the cryptocurrency rally first take place at the end of the third quarter.
Here are the best reasons to stay in the crypto market.
1. October is one of the best performing months
Historically, October is one of the best performing months of the year; that’s why it’s also known as Uptober. The bullish prediction for October comes mainly from Bitcoin’s historical performance.
Over the past five years, Bitcoin's growth in October has ranged from 10% to 40%.
Data from CoinGlass
September this year also saw a shift from a bear market to a bull market, and considering BTC’s performance so far this week, this is largely due to the actions of the Federal Reserve. On September 18, the Fed’s decision to cut interest rates by 50 basis points triggered a surge in the price of BTC from around $59,000 to over $62,000.
2. Fourth quarter historical returns
Historically, the fourth quarter also has the highest returns of the year.
Experts at Bitwise Investments analyzed Bitcoin’s seasonality in an article published this month, highlighting the downward trend in September in previous years and also the outlook for the rest of 2024.
Based on their chart of Bitcoin’s average monthly returns from 2010 to 2024, we can see a bullish trend throughout the fourth quarter.
Average monthly return of BTC from 2010 to 2024
The data was collected from August 2010 to September 2024 by Bitwise Asset Management, Glassnode, and ETC Group.
3. M2 prediction and BTC
M2 is a measure of the money supply, including cash, checking deposits, and other deposits that are readily convertible to cash. Basically, M2 tracks the global money supply. The more money in the system, the more money will flow into the cryptocurrency market.
A few days ago, Raoul Pal shared a post via X highlighting Bloomberg’s 10-week forecast for M2 supply and how Bitcoin is performing.
Global M2 and BTC
Pal shared this chart on September 16, and since then, the BTC price has surged past the $63,000 level.
According to the chart, while global M2 exceeded $1 trillion in December 2023, it is expected to grow significantly by the end of 2024, which means that more funds may flow into the cryptocurrency market.
4. Historically, the bull market started from this time
Another reason why you should not leave the cryptocurrency market is that historically, bull runs begin at this point.
Recently, Martin Leinweber, digital asset strategist at MarketVector research firm, shared the current state of the cryptocurrency market.
He wrote in an article for X that the cryptocurrency market is closely tracking historical bull cycles.
He mentioned that the rally before the 2024 halving was stronger than usual, which was mainly attributed to the expectation of the U.S. spot Bitcoin ETF. He also said that the rally after the halving was weaker than other cycles.
However, if historical cycles are any guide, there are strong signs that the market will continue to recover from here. History shows that the length of each cryptocurrency cycle is gradually increasing, a trend that could indicate rising institutional participation.
The longer the cycle, the more mature and stable the market environment. The first cycle between 2010 and 2011 was the shortest, while the current fifth cycle began in 2022.
Crypto Cycle Overview
5. Rate cuts
On September 18, the Federal Reserve decided to cut interest rates by 50 basis points. The rate cut means that more funds will flow into the market over time.
Lookonchain recently analyzed how the Fed’s interest rate cut decisions might affect the price of Bitcoin in the future. They shared a chart showing the impact of interest rate cuts and hikes on BTC prices over the past 10 years.
The biggest impact on Bitcoin’s price occurred in 2020, when the United States implemented an emergency rate cut, triggering a cryptocurrency rally between 2020 and 2022.
Federal Reserve Rates and Bitcoin Prices
Bitcoin started a new round of gains this week, driven by recent interest rate cuts and an unexpected drop in the number of weekly unemployment benefit applications in the United States.
6. 2024 US election
The 2024 US election is another reason to be bullish on the cryptocurrency market.
This year, Bitcoin and cryptocurrencies have become a political topic, with the strongest support coming from former U.S. President Donald Trump, who has consistently stressed the importance of Bitcoin and stressed that the U.S. should not sell its Bitcoin reserves.
The Trump family recently announced its cryptocurrency initiative, World Liberty Financial, as part of a broader decentralized finance project.
These are just a few of the many reasons why you should continue to invest in cryptocurrencies. The market is maturing, regulation is getting tighter, and institutional adoption is increasing, reflecting growing trust in the industry.
