September Effect, What's The Fate Of This Year's Crypto Market?

Illustration (photo: Unsplash)

JAKARTA - September became a sacred month for investors, because of a long history that shows sluggish market performance, both on traditional stock markets and the crypto asset market.

In terms of crypto assets, Coinclass data shows that since 2013, the average Bitcoin return in September has been more negative. However, the last two years gave a positive surprise, where Bitcoin rose 3.91% in September 2023 and 7.29% in 2024.

Reku analyst, Fahmi Almuttaqin, assesses that this is caused by various factors, ranging from tightening global liquidity, Fed interest rate decisions, to institutional investor portfolio rebalancing actions. Even negative expectations investors themselves often strengthen the downward trend.

"But interestingly, in the last two years, September has provided a positive return for both Bitcoin and Ethereum, although it is still the month with the worst historical average return for Bitcoin so far," explained Fahmi.

Fahmi sees the support of institutional funding flows through Spot's ETF, the increase in US money supply, to the opportunity to cut the Fed's interest rates could be a rally catalyst, especially for Bitcoin and Ethereum.

"This can support investor optimism for risky assets such as US stocks and cryptocurrencies, especially if the Fed decides to lower interest rates at a FOMC meeting in mid-September," he added.

Although September Effect is an interesting historical pattern, Fahmi insists that investors not only rely on this trend. The most important lesson is to always prioritize solid risk management.

"Instead of panicking or making an impulsive sell decision, the strategy that investors can take is to monitor fundamental and macroeconomic factors that are taking place to make a wiser investment decision," he said.