Will Bitcoin serve as the starting point for this year's market surge?
In an unexpected turn of events, Bitcoin, the world's leading cryptocurrency, is breaking the long-standing curse of average losses in September, making this month a winner instead. This unusual performance in the stock market today is causing a stir among experts and experienced market participants, who find the strength and calmness of the current bull market in Bitcoin puzzling.
Bitcoin's current bull market is behaving differently from its predecessors, with the cryptocurrency experiencing an impressive performance, reaching its best result since 2012. This current gain of over eight percent would be the second strongest September in Bitcoin's history, surpassed only by the year 2012 when a growth of almost 20 percent was recorded.
The relative stability in Bitcoin is causing divided opinions among market participants. While some find the lack of explosive dynamics of past cycles concerning, others see it as a reflection of Bitcoin's newfound maturity. The volatility in Bitcoin has reached its lowest level in over a decade, a testament to this unusual calmness in the stock market.
The current bull market in Bitcoin is unusually calm, with corrections currently much milder than in past cycles. This calmness, combined with the historically strong fourth quarter for Bitcoin, sets the stage for a potentially historic end to the year. The fourth quarter is known for its legendary year-end rallies that often led to new all-time highs in the past.
While gold and the S&P 500 are setting new record highs, Bitcoin is consolidating at high levels after reaching new highs in the previous month. This consolidation could be a sign of pent-up energy meeting the historically strong fourth quarter for Bitcoin, potentially leading to further growth in the stock market today.
However, it's important to note that the largest institutional investor in Bitcoin as of September 2022, BlackRock, known for substantial Bitcoin exposure, has not publicly detailed its precise monthly holdings for September 2022. Data shows major Bitcoin whales had sold over 114,000 BTC in the previous 30 days, indicating a reduction in large institutional Bitcoin holdings during that period.
The maximum pullback from the all-time high this time was a modest 30 percent, a stark contrast to the more substantial corrections seen in past cycles. This relative stability might be a cause for optimism, suggesting a more resilient market in the stock market today.
For those interested, Bitcoin's International Securities Identification Number (ISIN) is CRYPT0000BTC.
As always, it's crucial to approach investments with caution and do thorough research before making any decisions in the stock market today.
Disclosure: Mr. Bernd Förtsch, the management and majority shareholder of the publisher Boersenmedien AG, has entered into direct and indirect positions in the financial instruments mentioned in the publication or related derivatives.
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