Will things improve for Bitcoin in September after a punishing August? Maybe not, Bitwise warns.
Bitcoin is facing “seasonal headwinds” and could experience painful pullbacks in September, according to a new Bitwise report.
Historically speaking, August is flat for the world’s biggest cryptocurrency — with typical gains of 0.23% over the course of the month.
Right now, BTC is bucking that trend. It’s down 4.86% at the time of writing, and is set to close in the red for the fourth August running.
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Meanwhile, September tends to be one of Bitcoin’s weakest months, with an average drawdown of 4.68%.
That’s led Bitwise to warn that the current backdrop “tempers near-term bullish conviction” — with weaker inflows into exchange-traded funds suggesting that investors are reluctant to increase their exposure when prices are high.
It might not all be bad news though, and there are factors that could help BTC buck the trend next month. For one, we’re due to find out whether the Federal Reserve will cut interest rates for the first time in 2025, and this could prove to be bullish.
Data from CME FedWatch now shows there’s an 88.2% chance that the cost of borrowing will be slashed at the next Federal Open Markets Committee meeting — and that’s all thanks to the hints dropped by Jerome Powell last week.
“Continuation of the Fed’s easing cycle would extend the U.S. recovery and crypto bull phase, though the upcoming framework review is expected to reaffirm a strict 2% inflation target.”
Bitwise also says Larry Fink’s ascension to interim co-chair of the World Economic Forum is a significant development — putting a “pro-Bitcoin, pro-tokenization advocate at the center of global policy dialogue.”
Looking to Ether, the report adds that there appears to be a “structural rotation of risk away from Bitcoin dominance.” Authors also point to how the EU is considering whether to roll out its controversial digital euro on the Ethereum blockchain, which could amount to a ringing endorsement of this decentralized infrastructure.
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Bitwise went on to touch on the sluggish progress so far that the Trump administration has made in making a strategic Bitcoin reserve a reality — with uncertainty about how much BTC the government currently holds.
But it’s interesting to note that Brazil is currently examining whether to allocate up to 5% of its foreign reserves into BTC — the equivalent of $19 billion. That would equate to a warchest of about 173,000 coins at current market rates, and eclipse what the U.S. has planned. Given the government doesn’t own any coins at this point, this would also contribute to additional buying pressure if approved.
