Bitcoin (BTC) has just ended a three-year streak of negative average returns during the summer and is now entering the worst month known as "Red September."
September is referred to as "red" because Bitcoin (BTC) has an average return of -3.77% in September over the past 12 years (since 2013), the lowest for the year. September is also the month when China implemented two major cryptocurrency bans in 2017 and 2021.
This record is primarily due to six consecutive years of losses from 2017 to 2022. However, in 2023, the situation reversed, with Bitcoin (BTC) achieving gains in September for two consecutive years, including a 7.29% increase in September 2024, setting a historical best record.
This phenomenon originates from the stock market, where September is also the worst-performing month for the S&P 500 index. Investors tend to avoid risks after returning from summer vacations, reallocating assets before the fourth quarter.
However, this downturn usually does not last. Historical data shows that losses in September are often reversed in October. According to CoinGlass, October has seen gains for six consecutive years, with Bitcoin (BTC) experiencing losses only twice in its history.
Bitcoin (BTC) had significant price volatility and limited tracking in its early days. It first broke the $1,000 mark in 2013, attracting mainstream media attention and leading to more comprehensive record-keeping. That same year, the industry data platform CoinMarketCap was launched, followed by CoinGecko in 2014.
From 2013 to 2016, Bitcoin (BTC) had two up months and two down months in September. In 2017, driven by the initial coin offering (ICO) boom, Bitcoin (BTC) broke the $1,000 mark for the second time and first surpassed $2,000. The speculative frenzy prompted the People's Bank of China to ban ICOs on September 4, marking the beginning of six consecutive years of "Red September." South Korea followed suit, implementing an ICO ban on September 29, with other regional regulators issuing warnings.
Subsequently, the market entered its first crypto winter, with most ICO tokens experiencing significant price declines. Reports on September 5 indicated that Goldman Sachs would abandon its cryptocurrency trading division, which the bank later denied as "fake news."
September 2019 faced another setback with the highly anticipated launch of Bakkt Bitcoin (BTC) futures. Despite strong expectations for institutional inflows, trading volume was sluggish, and the debut was considered a failure. Three days later, Bitcoin (BTC) plummeted from nearly $10,000 to below $8,000. A report from Binance Research published on September 30, 2019, indicated that Bakkt's "disappointing start" was one of the reasons for the decline in Bitcoin (BTC) prices.
The following three Septembers reflected the pandemic period and its impacts. The early COVID-19 pandemic reinforced the narrative of Bitcoin (BTC) as an anti-inflation tool, but in September 2020, funds shifted towards Ethereum (ETH), marking the beginning of "DeFi summer."
In September 2021, China again introduced bans on cryptocurrency mining and trading. In 2022, the Terra/LUNA collapse in May severely impacted the market, and in September, the Federal Reserve raised interest rates by 0.75 percentage points for the fifth time, totaling seven increases for the year, further exacerbating Bitcoin (BTC) declines.
After six consecutive years of losses in September, Bitcoin (BTC) broke this trend in 2023. The key catalyst occurred on August 29 when a federal appeals court ruled that the U.S. Securities and Exchange Commission's (SEC) rejection of Grayscale's application to convert its Bitcoin trust into a spot ETF was "arbitrary and capricious."
Following this ruling, regulators began to re-examine related applications, reigniting market confidence that the approval of a U.S. spot Bitcoin (BTC) ETF was a foregone conclusion. The ruling injected momentum into September, helping Bitcoin (BTC) rise approximately 4% that month. The Federal Reserve also maintained interest rates in September after raising them 11 times in 12 consecutive meetings since March 2022, boosting market sentiment.
A spot Bitcoin (BTC) ETF was approved and listed in the U.S. in early 2024. By mid-year, the ETF's average daily trading volume reached billions of dollars. The macro environment became more favorable, with the Federal Reserve implementing a rate cut on September 18, 2024, the first since March 2020.
On September 16, 2024, the World Liberty Financial project was officially launched and quickly became a new focal point in the U.S. elections. The market widely viewed this project as a new cryptocurrency initiative from the Trump camp, coinciding with his successful presidential campaign, marking a recognition of cryptocurrency at the highest political level.
Bitcoin (BTC) is about to face September 2025, carrying historical pressure. September has long been a market obstacle due to regulatory shocks and tightening cycles, with investor sentiment repeatedly impacted.
Compared to previous downturn cycles, this year's overall environment is more favorable. The spot Bitcoin (BTC) ETF continues to achieve billions in trading volume, becoming an important entry point for institutional funds. During 2025, distressed companies are increasingly adopting Bitcoin (BTC) asset management strategies to turn around their fortunes.
The crypto industry also brings the latest speculation from China, with rumors in August suggesting that regulators might allow the circulation of stablecoins pegged to the offshore yuan, although this has not yet been confirmed officially.
Powell made dovish remarks in his last Jackson Hole speech. Source: AP
Investor attention is focused on the U.S., where the Federal Reserve seems to have shifted. In late August, Federal Reserve Chairman Powell delivered his last Jackson Hole speech before his term ends in May 2026. This meeting is one of the most closely watched events in the global economic arena, where the Fed chair traditionally signals policy direction.
In 2022, Powell warned that aggressive rate hikes would bring "pain" to households and businesses. This year, he shifted to a dovish tone, stating that "the balance of risks is shifting," suggesting that the Fed may adjust its policy stance.
The market widely expects the Federal Reserve to cut rates again at the Federal Open Market Committee meeting scheduled for September 16-17.
Related: Hackers discover new technology that can hide malware in Ethereum (ETH) smart contracts
Original article: “Bitcoin (BTC) is expected to break the 'Red September' downturn curse for the third consecutive year”
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