How Does Bitcoin Perform In September?

When Green Day released Wake Me Up When September Ends in 2005, Bitcoin was still around four years off from existing. Nonetheless, the sentiment of the song rings true for countless Bitcoin traders today, with September routinely being a terrible month for the BTC price.

According to a study by Kraken Intelligence, Bitcoin has only posted a positive return in three out of the past 10 Septembers, with an average monthly return of -7%. This is the lowest among all months, and contrasts with the often-positive returns in August and October.

This phenomenon has been dubbed the "September effect" or the "September curse" by some commentators. But how true is this narrative? And what are the possible explanations for it?

How Does Bitcoin Perform In September?

To answer these questions, we checked Bitcoin’s price performance in September for the last four years, from 2019 to 2022. We calculated the percentage change of each month compared to the previous month, as well as the average percentage change of all Septembers in the period.

Here are the results:

As we can see from the table, Bitcoin’s price indeed declined in September for four consecutive years, from 2019 to 2022. The average percentage change of these four Septembers was -8.74%, which is significantly negative.

What are the possible reasons for Bitcoin’s poor performance in September?
There is no definitive answer to this question, as there are many factors that can influence Bitcoin’s price movement.

However, some of the common explanations that have been proposed by various analysts and commentators are:

• Seasonality: Some argue that September is historically a weak month for financial markets in general, as investors tend to sell their assets after the summer holidays and before the end of the fiscal year. This could create downward pressure on Bitcoin’s price as well.

• Regulation: Some suggest that September is often a month when regulators announce or implement new rules or policies regarding cryptocurrencies or related industries. This could create uncertainty or fear among investors and traders, leading to lower demand and lower prices for Bitcoin.

• Sentiment: Some claim that September is a month when negative news or events tend to dominate the headlines or social media regarding cryptocurrencies or related industries. This could create pessimism or panic among investors and traders, leading to lower confidence and lower prices for Bitcoin.

Conclusion

The accepted narrative that Bitcoin performs poorly in September, usually losing value, is supported by the historical data. Outliers have occurred though. For instance, in September 2017, Bitcoin surged by 66% and hit an all-time-high as it approached the launch of the first Bitcoin futures contracts by CME and CBOE. That said, the SEC pushing a decision date on a Bitcoin ETF until at least October means there’s not going to be any good ETF news this month, and as the data shows, the odds of September being a down month again, are probably much better than a coin toss.