Bitcoin defies seasonality, poised for biggest September surge in years as Fed cuts ratesAccording to intel gathered by Zhitong Finance, Bitcoin is on track for one of its biggest September gains in recent years. The global wave of interest rate cuts, spearheaded by the Federal Reserve, has helped the largest digital asset weather the seasonal headwinds
Bitcoin defies seasonality, poised for biggest September surge in years as Fed cuts rates
According to intel gathered by Zhitong Finance, Bitcoin is on track for one of its biggest September gains in recent years. The global wave of interest rate cuts, spearheaded by the Federal Reserve, has helped the largest digital asset weather the seasonal headwinds. Data shows Bitcoin is up over 10% this month, while its average decline in September over the past decade has been 5.9%. Meanwhile, an index of smaller cryptocurrencies has surged more than 20%, suggesting the looser financial environment is invigorating riskier parts of the crypto market.
The Fed, European Central Bank, and the People's Bank of China all cut borrowing costs in September to support economic growth. Investors responded to the accommodative monetary environment by bidding up assets from stocks to gold, anticipating further stimulus in the future. For the Fed, the correlation with Bitcoin remains the highest, said Sean McNulty, head of trading at liquidity provider ArbelosMarkets. Of course, the easing measures taken by other central banks also help.
Bitcoin gained 1.2% on Friday, trading at $65,334 as of publication. The digital asset has surged 56% in 2024, boosted by inflows into U.S. spot Bitcoin ETFs, but it remains below its all-time high of $73,798 hit in March. Caroline Mauron, co-founder of digital asset derivatives trading liquidity provider OrbitMarkets, said the $65,000 level was likely to stick for several hours as a large number of options contracts expire on Friday. If it fails to break through $65,000 decisively, it could signal a period of weakness for the coin, according to a report from cryptocurrency exchange Kraken.
Beyond monetary policy, the digital asset industry is also awaiting the outcome of the US Presidential election. Many executives expect clearer US crypto regulation in the months after the election vote to boost sentiment.
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