Can Bitcoin Overcome Its September Slump? This Year's Potential.

Historically, September has been the worst month for both Bitcoin and stocks. Since 2010, Bitcoin (BTCUSD), which is currently the largest cryptocurrency by market capitalization, has suffered an average loss of about 4.5% in this particular month as per data from Glassnode and ETC Group. Similarly, S&P 500 SPX has recorded a monthly decline of around 1.2% on average since its inception in 1928, with only a mere success rate of ending higher at approximately 44.3%. 
 
This trend prompts investors to keep an eye on the Federal Reserve policymakers' meeting scheduled for Sept. 17-18, where it is expected that they will announce their first interest rate cut since March last year when COVID-19 started spreading across the U.S. 
 
According to CME FedWatch Tool's late Thursday statistics, Fed fund futures traders have predicted a roughly estimated likelihood of nearly sixty percent that the central bank of the U.S.A. will reduce its key interest rate by twenty-five basis points in September, while there’s also a forty percent chance that it might go beyond to deliver a half-point cut. 
 
Analysts like Joel Kruger from LMAX Group believe if Chair Jerome Powell's remarks during his subsequent news conference lean more towards dovish policy statements, then all risk assets are likely to perform positively throughout September. 
 
Interestingly, though bitcoin’s sensitivity towards global growth expectations seems to have diminished over the past few months, according to André Dragosch, who leads research at ETC Group. 
He further added, based on the ETC Group’s macro-factor model findings, that bitcoin performance over the last four months was less influenced by changes in global growth expectations but rather monetary policy or the U.S. dollar had more impact on it, creating a tailwind effect. 
 
Dragosch predicts that given the current scenario, the main factors governing bitcoin's performance could shift from global headwinds to monetary policy tailwinds, making the environment favorable enough for crypto currency through the rest of the year 
 
The data from the ETC group also shows that seasonality favors crypto in October and November, where bitcoin has posted an average return of 29.5% and 37.9%, respectively, since 2010. 
 
This trend could potentially push the bullish outlook further, leading Bitcoin to fresh record highs by year-end, as per Kruger’s views. 
However, on Thursday Bitcoin fell by three percent to around $56,332 which is still roughly twenty-three point seven percent away from its highest peak of approximately $73,798 reached back in March this year. 
 
The historical performance of Bitcoin during September does not guarantee future results, but it offers a perspective into the past behavior of this cryptocurrency during this month. It's important for investors to consider these factors along with their own personal investment goals and risk tolerance before making any investment decisions. 
 
To conclude, while historically both stocks and bitcoins have underperformed in September, given current market dynamics, analysts predict potential positive outcomes, especially for bitcoin through the rest of the year-end.