Key facts
- Bitcoin saw its best August performance since 2017, with a 25% increase.
- Bitcoin's price has fallen below $77,000 at the beginning of September.
- September has historically been a weak month for Bitcoin, averaging a 3% loss.
- Rising bond yields and oil prices are creating headwinds for cryptocurrencies.
- Bitcoin ETFs experienced significant outflows, while Ethereum ETFs saw continued inflows.
Bitcoin experienced its strongest August performance since 2017, with a 25% gain, but has entered September with a decline below $77,000. Historically, September has been Bitcoin's worst-performing month, averaging a nearly 3% loss, although the past three years have bucked this trend.
Headwinds are emerging, including elevated inflation concerns highlighted by Fed Chair Kevin Warsh at Jackson Hole, which pushed US 10-year Treasury yields to a cycle high of 4.784%. Markets are now pricing in a 66% probability of a 25-basis-point Federal Reserve rate hike at the September 16 meeting, with potential for another hike by year-end. Geopolitical tensions, with continued US strikes against Iran, have also driven WTI crude oil prices up 2% to $88 a barrel, the highest since late July.
These factors—higher rates tightening financial conditions and strengthening the dollar—typically act as headwinds for risk assets like Bitcoin. The market faces a battle between potential tailwinds from ETF inflows, on-chain activity, and a booming crypto market, versus headwinds from war, rising oil prices, inflation, and potential rate hikes.
In broader market movements, crypto majors were down 2-4%, with Bitcoin at $76.6k and Ethereum at $2,376. Bitcoin ETFs saw $237 million in net outflows, while Ethereum ETFs continued their inflow streak with $8.6 million. Twenty-one major banks, including Citi, Goldman Sachs, BofA, and UBS, plan to form a stablecoin company in 2026, starting with a dollar token in early 2027. The SEC has proposed modernizing transfer agent rules to allow blockchains as official record keepers, with a roundtable scheduled for September 17.
Robinhood Chain has set new records for revenue and DEX volume. Separately, Ethena launched Ethena Pay, a neobank app, with Avalanche as its settlement layer, causing ENA to rise 9%. Meme coins were largely down, while leaders on Robinhood Chain showed mixed performance. Strategy CEO Phong Le defended selling Bitcoin near $60,000 and repurchasing at $80,318, emphasizing cost of capital over price.