Bitcoin’s narrative is evolving as it approaches what has historically been its most challenging month, often referred to as “red September.” This year marks a significant pivot, breaking a three-year trend of negative summer returns and entering September with newfound momentum. However, the month carries a notorious reputation for Bitcoin, which has seen average returns drop by 3.77% over the past 12 years, drawn from a record of losses between 2017 and 2022.
September’s negative connotation is echoed in traditional equity markets as well, where it is similarly the weakest month for the S&P 500. Investors returning from summer often adopt a more cautious approach, prompting funds to rebalance ahead of the fourth quarter. In the cryptocurrency realm, September has been overshadowed by pivotal regulatory events, notably China’s bans on crypto trading and ICOs in 2017 and 2021.
The transformation of Bitcoin’s September performance began in 2023, where for the first time in six years, it registered gains. Notably, Bitcoin recorded its best September ever in 2024, closing the month up 7.29%. Analysts attribute this shift in fortunes to a significant regulatory ruling on August 29, which found that the U.S. Securities and Exchange Commission’s (SEC) rejection of Grayscale’s Bitcoin trust conversion into a spot exchange-traded fund (ETF) was “arbitrary and capricious.” This landmark decision revived optimism around Bitcoin’s future, paving the way for ETF approvals in early 2024.
The historical context of Bitcoin’s performance reveals a rollercoaster journey through various regulatory landscapes. In its nascent years, Bitcoin’s price was volatile and largely untracked until it surpassed the $1,000 mark in 2013, coinciding with the launch of CoinMarketCap. The following years were marked by an even split in performance, until 2017, when a surge in speculative trading led to regulatory crackdowns. Following the central bank’s ban on ICOs, Bitcoin spent six consecutive years in a downward spiral through September.
Significant events in these years included a downturn following Goldman Sachs’ reported abandonment of its crypto desk in 2018, a tepid launch of Bakkt’s Bitcoin futures in 2019, and the impact of the COVID-19 pandemic. The onset of the pandemic initially bolstered Bitcoin’s narrative as an inflation hedge, but subsequent years saw setbacks, including another ban from China in September 2021 and the collapse of Terra/LUNA in 2022, exacerbated by aggressive rate hikes from the Federal Reserve.
However, the landscape has dramatically shifted in 2023. Bitcoin’s resurgence can be attributed in part to favorable monetary policy and evolving investor sentiment. The recent steadying of interest rates by the Federal Reserve and robust trading volumes in spot Bitcoin ETFs have positioned Bitcoin favorably as it moves into September 2025. The momentum also coincides with speculation about potential regulatory changes in China concerning stablecoins pegged to the yuan.
As September 2025 approaches, market watchers note a shift in the backdrop compared to past downturn cycles. With increasing institutional adoption and renewed optimism surrounding regulatory frameworks, investors anticipate a possible continuation of Bitcoin’s upward trajectory. This provides a basis for cautious optimism, with all eyes on upcoming rate decisions and the overarching sentiment in the crypto space.
