Bitcoin outperforms seasonal Jinx with one of the best September gains

(Bloomberg) — Bitcoin is on track for one of its biggest gains in September as a global wave of interest rate cuts led by the U.S. Federal Reserve helps the largest digital asset defy the seasonal curse.

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The token is up over 10% this month, in contrast to an average fall of 5.9% in September over the past decade, data compiled by Bloomberg show. An index of smaller coins has risen more than 20%, a sign that looser financial conditions are buoying riskier segments of the crypto market.

The Fed, European Central Bank and People's Bank of China all cut borrowing costs in September to support economic growth. Investors responded to looser monetary conditions by bidding up everything from stocks to gold in anticipation of further economic stimulus.

“Bitcoin’s correlation with monetary policy remains at its highest with respect to the Fed,” said Sean McNulty, director of trading at liquidity provider Arbelos Markets. “The easing of other central banks certainly helps too.”

The cryptocurrency rose as much as 2.8% on Friday, changing hands at $65,745 as of 4:25 p.m. in New York. It is up 56% in 2024, helped by inflows into US Bitcoin exchange-traded funds, but is below March's record of $73,798.

The $65,000 level could prove “sticky” for a few hours on Friday due to the expiry of a large number of options contracts, said Caroline Mauron, co-founder of Orbit Markets, a liquidity provider for digital asset derivatives trading.

Failure to “decisively” break through the $65,000 mark could indicate a weaker phase for the token, according to a statement from crypto exchange Kraken.

Monetary policy aside, the digital asset industry is waiting for the resolution of the US presidential election campaign. Many executives expect clearer American crypto regulations to lift sentiment in the months following the vote.

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