The September Effect – How Are We Faring?

Reading Time: 2 minutes
  • The September Effect has it that markets offer their worst returns during that month of any in the year
  • Bitcoin is not immune and typically sees its worst returns in September
  • How are the crypto and traditional markets faring this time round?

The September Effect is a phenomenon that suggests that markets tend to offer their worst returns during that month, something we reported on at the start of the month. With over half the month gone, how is the crypto market shaping against this semi-superstition?

Bitcoin Succumbing to the September Effect

Bitcoin began September at $11,700, moving up to $12,000 just hours into the ‘cursed’ month. It couldn’t break through this barrier however, and very soon all thoughts of Bitcoin overcoming the September Effect vanished – it dropped $2,000 within 48 hours, meaning that September started with a 16% loss.

Since that drop Bitcoin has been staging an unconvincing recovery, reaching $11,000 at the time of writing, leaving us at a 6% loss so far this month.

The cryptocurrency market cap began September at $362 billion, which rose sharply to $377 billion alongside Bitcoin’s rise. Following Bitcoin’s collapse however the market cap has followed suit, coming in at $335 billion at the time of writing, leaving us with a 7.45% loss so far this month.

Alt Coins Fare No Better

Has the alt coin market cap fared any better fighting the September Effect? It started September at $162 billion and also enjoyed a brief boost before collapsing as people sold their alts alongside Bitcoin’s crash, leaving us with an alt coin market cap of $150 million.

This leaves us with an almost identical September loss as that of the total market cap, coming in at 7.4% down compared to September 1.

All Markets Feeling the Pain

It’s not just the crypto markets that are reeling this month – the S&P 500, NASDAQ, Dow Jones, and even gold had all endured minor collapses within 48 hours of the calendar flipping from August to September and are now at a loss compared to where they were at the end of last month.

Of course we can’t blame the September Effect for these reduced returns, and we will have to go some way to beat March’s downturn, but it is pretty incredible that history has repeated itself once more and so early into the month.

There are still 10 days left of September however, so let’s see if the markets can banish the September Effect juju this time round.