Bitcoin’s dominance in the market could come back in September, even if briefly. The largest cryptocurrency’s performance this summer has been underwhelming compared with the broader universe of crypto assets. With ether in the spotlight, bitcoin is down 7% in August versus ETH’s 17% gain. Over the past two months, it’s up less than 1% – lagging ETH’s 74% climb. According to TradingView, bitcoin dominance – an actual measure of its relative market share – has declined more than 5% in the past month. But in a market packed with newly tradeable assets – specifically, a heap of public companies focused on generating shareholder returns by investing heavily in crypto – if September trading is as choppy as traders have come to expect, the “OG crypto” might be the place for short-term gains. “While we don’t see signs of excessive leverage like last cycle … there has been a whole lot of new stocks that need buyers to maintain their current price,” said Matthew Sigel, VanEck’s head of digital assets research. “If retail investor appetite falls materially, my hunch is that those stocks will definitely suffer and bitcoin itself might end up being an outperformer in the space.” Historically, September is one of bitcoin’s weakest months. It finished the month in the green the last two years, but it has an average decline of 3.7% going back to 2013 and a median decline of 4.3%, according to CoinGlass. Bitcoin has then rallied in all but two Octobers going back to 2013, a month that has become known as “Uptober” in the crypto community. Bitcoin’s average and median October returns are each about 21%. “Bitcoin should chop around at the beginning of September and that’s where you’re probably getting towards local highs for ETH-BTC,” said Satraj Bambra, CEO of hybrid crypto exchange Rails. “So you will see ETH-BTC cool off and that means bitcoin dominance takes a bit of a run against ETH in September.” The ETH-BTC ratio measures ether’s performance relative to bitcoin’s. If the ratio is rising, that indicates ether is outperforming bitcoin. In the month ahead, investors are watching the Federal Reserve’s next meeting on Sept. 16-17, after Chair Jerome Powell this month hinted at a potential interest rate cut . Bitcoin typically performs well in pro-liquidity environments. While bitcoin is still vulnerable to sharp, broad-market sell-offs and could see more weakness if macro conditions deteriorate, investors expect its price to continue to be supported by large purchases by bitcoin accumulators and ETF inflows. Bitcoin reached an all-time high of nearly $125,000 on Aug. 13.
