Bitcoin and Ethereum Prices Fall Often in September: Report

by James · September 6, 2022

Many companies featured on Money advertise with us. Opinions are our own, but compensation and
in-depth research determines where and how companies can be displayed. Learn more about how we make money.

September is a great time for pumpkin picking and your favorite Starbucks lattes… but maybe not for your crypto portfolio.

“Looking ahead, seasonality does not benefit the asset class as September has tended to be a terrible month for Bitcoin and Ethereum,” analysts at Bespoke Investment Group wrote in a note to clients last week.

If the prices of cryptocurrencies such as bitcoin and ether suffer this month, it would not be out of the ordinary for how they have performed in 2022 overall. As of Tuesday morning, bitcoin’s price is down about 58% so far this year, and ether is down about 56%.

Financial assets in general have struggled amid soaring inflation and interest rate hikes — a tool the Federal Reserve uses to cool economic activity when consumer prices are high, but which can also push the prices of investments that may be in your portfolio, such as stocks and crypto.

September is known to be a bad month for the stock market. As Money reported last week, the S&P 500 has fallen a median of 0.42% and had positive returns just 44.7% of the time in September since 1928, according to data from Bespoke.

But the start of autumn can also create problems for crypto investors.

Table of Contents

Are crypto prices rising or falling in September?

Over the past five years, bitcoin’s average price drop has been around 8.5% in September, according to data from Bespoke. That compares with an average increase of 24.6% in October, and jumps of 7.9% in November and 11.1% in December. Looking back over Bespoke’s October 2014 data, bitcoin’s price has been higher from the beginning to the end of September only 28.6% of the time, with an average loss of 4.82%

It’s a similar story for ether. Over the past three years, the price of Ether has fallen an average of 8.5% in September compared to an average increase of 17.5% in October. And looking back at Bespoke’s Ethereum data since November 2017, the crypto price has been higher from the beginning to the end of September only 25% of the time with an average loss of 10.8%.

However, Ether’s monthly performance in June has been worse than September, with the price falling an average of 15% during that month during Bespoke’s data.

What can we expect from crypto prices this year?

Cryptocurrency prices are anything but predictable. Something as seemingly insignificant as a tweet can send a price skyrocketing or plummeting.

Experts say, however, that investors have taken some risk off the table recently in the face of interest rate increases from the Federal Reserve. All eyes will be on the central bank’s next move as its next policy meeting approaches later in September.

There is also a big event happening soon in the crypto world called “the Merge”, which is an upgrade to the Ethereum blockchain. The merger will transition the Ethereum network from the proof-of-work model to the proof-of-stake model, which should significantly reduce energy consumption and lay the foundation for other aspects of the roadmap, such as making transactions more efficient.

Be aware that there may be volatility in the price of Ether as the merger approaches, but some experts say it could increase prices in the long run.

All in all, remember that crypto prices are risky and volatile. Financial advisors tend to say that if you’re going to invest in cryptocurrency, you should limit it to a small portion of your portfolio—like 2% to 5%—and treat it as a long-term investment rather than trying to get rich quickly.

Also, just because crypto prices have historically suffered in September doesn’t mean they will this year. As with any type of investment, past performance is never a guarantee of future performance – and trying to time the market based on factors such as seasonality is always a chance.