Bitcoin May Break Red September Cycle For Third Consecutive Year

Bitcoin snapped a three-year streak of negative summer average returns, but it now enters its worst month, known as “red September.”

September carries the dreaded nickname because it has delivered the lowest monthly returns for Bitcoin (BTC), averaging –3.77% across 12 years from 2013. It is also the month China imposed a pair of major crypto bans in 2017 and 2021.

That record is weighed down by six consecutive years of losses from 2017 to 2022. The tables turned in 2023, and Bitcoin has now posted two straight September gains, including its best September ever in 2024, when it closed the month up 7.29%.

The reputation comes from equities, where September is also the weakest month for the S&P 500. It’s when investors return from summer with a more risk-off posture and funds rebalance heading into the fourth quarter.

The gloom often doesn’t last. September’s losses have historically given way to October, or “Uptober,” a month that has delivered gains in six consecutive years and only two losses in Bitcoin’s history, according to CoinGlass.

Red September’s regulatory drag on Bitcoin

In Bitcoin’s early years, its price was scattered and not widely tracked. The asset first breached $1,000 in 2013, drawing mainstream media attention and prompting better archival records. That same year saw the launch of industry-native aggregator CoinMarketCap, followed by CoinGecko in 2014.

Related: June remains Bitcoin’s danger zone, while S&P 500 eyes summer rally

Between 2013 and 2016, Bitcoin’s September performance was evenly split, with two positive months and two negative ones. The pattern broke in 2017 during the initial coin offering (ICO) boom, when Bitcoin crossed $1,000 for the second time and passed $2,000 for the first. The speculative frenzy led China’s central bank to ban ICOs on Sept. 4, sparking the first of six consecutive red Septembers. South Korea followed with its own ICO ban on Sept. 29, while regulators elsewhere issued warnings.

The aftermath ushered in what became known as the first crypto winter, as countless ICO tokens crashed. By September 2018, Bitcoin had dropped from its December 2017 all-time high near $20,000 to below $7,000. A Sept. 5 media report claimed Goldman Sachs was abandoning its crypto desk plans. The bank later dismissed the story as “fake news.”

September 2019 added another blow with the long-awaited launch of Bakkt’s Bitcoin futures. Despite high expectations for institutional inflows, trading volumes were weak, and the debut was branded a flop. Three days later, Bitcoin plunged from near $10,000 to below $8,000. A Binance Research report published on Sept. 30, 2019, cited Bakkt’s “disappointing start” as a contributing factor to Bitcoin’s price decline.

The next three Septembers reflected the pandemic era and its fallout. While COVID-19 initially boosted Bitcoin’s narrative as an inflation hedge, September 2020 saw capital rotate into Ether (ETH) during the “DeFi Summer.”

In September 2021, China struck again with a ban on crypto mining and trading. The next year, the Terra/LUNA collapse in May left deep scars, and September’s 0.75 percentage point rate hike — its fifth in a year of seven hikes — added salt to Bitcoin’s injury.

Bitcoin’s “red September” streak breaks 

After six straight years of September losses, Bitcoin snapped the streak in 2023. A pivotal catalyst came on Aug. 29 when a federal appeals court ruled that the US Securities and Exchange Commission’s rejection of Grayscale’s bid to convert its Bitcoin trust into a spot exchange-traded fund (ETF) was “arbitrary and capricious.”

The decision forced regulators to revisit the application and revived confidence that a US spot Bitcoin ETF was inevitable. The ruling carried momentum into September, helping Bitcoin climb about 4% on the month. The US Federal Reserve also aided sentiment by holding rates steady after 11 hikes in 12 meetings starting from March 2022.

Related: Bitcoin treasury flops: These firms fumbled their BTC bets

Spot Bitcoin ETFs were approved and listed in the US in early 2024. By midyear, the financial instruments were routinely posting billions of dollars in daily trading volume. Macro conditions added fuel as the Fed delivered a rate cut on Sept. 18, 2024, which was the first since March 2020.

Then came the launch of World Liberty Financial on Sept. 16, 2024, which was quickly woven into US election narratives. Framed as a Donald Trump-aligned crypto venture, it debuted while he was in the midst of what would become a successful presidential campaign, signaling a political embrace of cryptocurrencies at the highest level.

Another rate cut could help Bitcoin break the “red September” curse

Bitcoin is heading into September 2025 carrying the weight of history. The month has long been a stumbling block, marked by regulatory shocks and tightening cycles that scarred investor sentiment.

This year, the backdrop looks stronger than in past downcycles. Spot Bitcoin ETFs continue to post billions in turnover and have become a gateway for institutional capital. Throughout 2025, struggling companies have turned to Bitcoin treasury strategies in a bid to flip their misfortunes.

The crypto industry also brings fresh speculation from August out of China, with rumors swirling that authorities could allow stablecoins pegged to the offshore yuan. So far, officials have made no confirmation.

Jerome Powell delivers dovish remarks in his final Jackson Hole speech. Source: Associated Press

Investors’ attention is squarely on the US, where the Fed appears to have pivoted. In late August, Fed Chair Jerome Powell delivered his final Jackson Hole speech before his term ends in May 2026. The symposium is one of the most closely watched events in global economics, as it is often used by Fed chairs to hint at policy direction.

In 2022, Powell warned of “pain” for households and businesses as the Fed pressed on with aggressive rate hikes. This year, he struck a dovish tone, saying that “shifting balance of risks” may warrant adjusting the Fed’s policy stance.

Another reduction is widely expected at the Federal Open Market Committee meeting scheduled for Sept. 16-17.

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