Bitcoin snaps the seasonal gap with one of the best gains since September

(Bloomberg) — Bitcoin is on track for one of its biggest gains since September as a global wave of interest rate cuts, highlighted by the U.S. Federal Reserve, helps the biggest digital asset overcome a seasonal doldrums.

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The token is up more than 10 percent this month, in contrast to an average decline of 5.9 percent in September over the past decade, data compiled by Bloomberg show. An index of smaller coins climbed more than 20 percent, a sign of the looser financial conditions that were animating the riskier segments of the crypto market.

The Fed, the European Central Bank and the People’s Bank of China all cut borrowing costs in September to support economic growth. Investors responded to the more accommodative monetary conditions by bidding up everything from stocks to gold, anticipating further stimulus ahead.

“The correlation between Bitcoin and monetary policy continues to be the highest relative to the Fed,” said Sean McNulty, director of trading at liquidity provider Arbelos Markets. “Certainly the easing of other central banks helps as well.”

The cryptocurrency rose 2.8 percent on Friday to trade at $65,745 as of 4:25 p.m. in New York. It rose 56% in 2024, helped by inflows in US Bitcoin exchange-traded funds, but was touched in March outside the record high of $73,798.

The $65,000 level could prove “sticky” for a few hours due to the expiration of a large number of options contracts on Friday, said Caroline Mauron, co-founder of Orbit Markets, a liquidity provider for trading digital asset derivatives .

Failure to “decisively” break above $65,000 could portend a weaker period for the token, according to a note from crypto exchange Kraken.

In addition to monetary policy, the digital asset industry is waiting for the resolution of the US presidential election race. Many executives expect a boost in sentiment from clearer US crypto regulations in the months after the vote.

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