Bitcoin set for a green September with nearly 10% rise, defying historical trend

For the month, Bitcoin is higher by 10%, which is in contrast to the average 5.9% fall it has seen in September for the past decade

Cryptocurrency Bitcoin is all set to post one of its best September, powered by a spate of rate cuts by central banks fuelling money into the asset class, helping it reverse the monthly downtrend it has been witnessing for the decade.

The US Fed, European Central Bank as well as the People’s Bank of China all have cut borrowing costs in September to support growth, pushing asset classes across-the-board higher.

“Bitcoin’s correlation with monetary policy continues to be highest with respect to the Fed,” Bloomberg News quoted Sean McNulty of Arbelos Markets.

For the month, Bitcoin is higher by 10%, which is in contrast to the average 5.9% fall it has seen in September for the past decade, shows Bloomberg data. Traditionally, September has been a month that has seen bitcoin clock negative returns, during the past decade.

According to Coindesk, this has helped Bitcoin enter October on a stronger note. The period from October-December has traditionally been a bullish phase, it said, with some expert projecting a level $70,000 in coming weeks. A higher monthly close in September has always yielded in a stronger October-December period during the past decade.

The September upmove comes on the back of a relatively quiet period between June to August, with only July seeing a higher monthly close.

Aside from central bank action, the US presidential election too has played a role in the rally in digital assets, as both Presidential candidates pitched to make the digital asset more mainstream. Several crypto watchers are suggesting further sentimental boost if American crypto regulations get clearer in the months after the US election.

Another Bloomberg News report said on September 30 Japan's Financial Services Agency may review its cryptocurrency rules, increasing the possibility of lower taxes on the digital assets. Japan's Mitsubishi UFJ is also looking at issuing stablecoins, or digital token with constant value.

Changpeng Zhao, the founder of Binance - world’s largest crypto exchange - also made his first comment after release from US custody over the weekend, pledging to invest more in the blockchain space, further helping the sentiment. Zhao's net worth is over $30 billion.