Grayscale’s ETF Victory Unlikely to Prevent Negative Monthly Return for Bitcoin
Grayscale’s recent victory in its ETF case is unlikely to prevent bitcoin from closing August with a negative monthly return. The digital asset’s performance in August casts uncertainty over what September will bring. According to CoinShares head of research James Butterfill, August’s price decline “has underscored bitcoin’s vulnerability from larger trades, exacerbated by current low volumes.” Butterfill predicts market indecision will characterize the beginning of September.
Dollar Strength and Low Trade Volumes Weigh on Bitcoin
Butterfill questions whether market conditions in September will be able to defend bitcoin at its current value. The strengthening U.S. dollar diminishes the risk-adjusted return associated with bitcoin, making it less attractive. Additionally, bitcoin trade volumes are lower than last year, indicating a negative sign. Butterfill explains that several factors, including regulatory crackdowns and the end of the Binance fee holiday, have resulted in the digital asset’s current inactivity.
September Brings Market Uncertainties
September historically has been a poorly performing month for bitcoin. Traders anticipate increased trade volume and volatility in September, with the end of the U.S. fiscal year leading to more position liquidation. Analyst Sergei Gorev expects negative dynamics in the crypto market due to profit fixing in general portfolios. However, James Butterfill has a more positive forecast for bitcoin in October and November, anticipating central banks to pivot and support the digital asset as macro data deteriorates.
Hot Take: Grayscale’s ETF victory may not have a significant impact on bitcoin’s performance in August. The strengthening U.S. dollar and low trade volumes pose challenges for the digital asset. September is historically a challenging month for bitcoin, but there is hope for a more positive outlook in October and November.
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