September is historically a tough month for cryptocurrencies, and bitcoin (BTC-USD) is kicking off the first trading day of September below the $60,000 level. Fundstrat vice president of digital asset strategy Sean Farrell joins Morning Brief to discuss what this month may have in store for crypto investors.
“If you look at the historical averages, September really is the only month in which bitcoin has an average negative return. But you know, we like to advise our clients and subscribers that you can’t just look at seasonality in and of itself. There are some structural things that are endemic to seasonality, like lack of liquidity that we’ve seen really take a toll on crypto markets over the past couple of weeks that do weigh on prices,” Farrell explains.
Instead of focusing on seasonality, he encourages investors to watch the Federal Reserve’s next moves as it gears up for an interest rate easing cycle. He explains that Friday’s jobs report will help paint a better picture of the Fed’s next moves as “a lot of the market right now is skittish about rate cuts.” With the jobs data expected to come in soft but non-recessionary, he adds, “Our money is still on the soft landing path.”
Farrell also notes that the election will also play into the crypto market’s performance this September: “It would be silly not to view the election as a critical factor that will come into play when thinking about crypto prices… Our in-house view is that if Trump were to get elected, that would certainly slap on a premium to crypto asset prices. Bitcoin, a lot of alts (alternative coins) that will now have a clearer path forward in terms of market structure and legislation that will support their growth here in the US.”
