Bitcoin Defies Historical September Performance With 10% Surge as ‘Coinbase Premium’ Rises

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As a seasoned analyst with over two decades of experience in the financial industry, I have witnessed numerous market cycles and trends that have shaped the economic landscape. The recent surge in Bitcoin’s price to over $66,000 is a testament to the resilience of this digital asset and the growing interest it continues to garner among investors worldwide.

The cost of the leading digital currency, Bitcoin, has surpassed $66,000 in the closing weeks of September, going against its usual weak showing for the month. This upward trend is being fueled by a series of interest rate reductions and an increasing ‘Coinbase Premium’.

In a recent post on the social media site X (previously known as Twitter), the Head of Research at CryptoQuant, Julio Moreno, pointed out that rising demand in the United States played a significant role in Bitcoin’s price surging to $65,000. This is suggested by the increasing Coinbase Premium Index, which indicates stronger demand for BTC on this platform.

The Coinbase Premium Index represents a measure comparing the price difference between Bitcoin trading on Coinbase’s USD market and Binance‘s Tether (USDT) market. A positive premium indicates that demand for Bitcoin on Coinbase is increasing, suggesting growing buying interest on the exchange.

A significantly reduced cost for a premium indicates a lack of strong demand among U.S. investors, a pattern that has previously corresponded with the lowest points in Bitcoin’s price history.

Today, Bitcoin surged in the U.S. market due to a significant increase in demand, pushing its price up towards $65,000. Moreover, the gap between Bitcoin’s price on Coinbase and other exchanges (known as the Coinbase premium) reached its peak level in two weeks.

— Julio Moreno (@jjcmoreno) September 27, 2024

From data provided by CCData, the overall performance of cryptocurrencies in September, spanning from 2010 to 2023, has averaged a decrease of about 4.51%. This makes September the month with the lowest average return on investment for cryptocurrencies, as compared to April and November which tend to offer the highest average gains.

In September, the Federal Reserve, European Central Bank, and People’s Bank of China each reduced lending rates as a means to boost economic expansion. This decision was well-received by investors, causing them to increase their investments in stocks, gold, and various other assets.

As an analyst, I’m observing that gold has hit a fresh record high, hovering around $2,700 per ounce. This surge, over 30%, makes it the best year-to-date performance of this century. Interestingly, this upward trend seems to correlate with the escalating U.S. M2 money supply, which is also reaching unprecedented levels.

Over the past several months, starting from February, the total amount of M2 money supply – consisting of cash in circulation, savings accounts, time deposits, and money market funds – has been steadily increasing and currently stands at an impressive $21.2 trillion, as reported by Trading Economics.

Significantly, Societe Generale has moved all of its commodity investments towards gold, primarily due to escalating geopolitical concerns and a declining overall commodity market trend.

The French bank increased its gold holdings to 7% of its total asset allocation, reflecting a 40% quarter-over-quarter rise. This pivot toward gold signals growing confidence in the yellow metal as a safe-haven asset amid ongoing uncertainties in global markets.

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2024-09-28 03:45