Bitcoin (BTC) is entering September with a negative monthly net return and a cloud of uncertainty over future prospects. Despite the recent court ruling in favor of Grayscale's ETF application, BTC is struggling to keep its value above $27,000.
According to analysts, the low volatility and transaction volume that marked August may be replaced by indecision and profit taking in September.
A US district court on Wednesday ruled that Grayscale Investments, the world's largest digital asset manager, meets the requirements to be an SEC filing company for the Bitcoin Trust (GBTC). This means GBTC shares could be converted into an ETF once the SEC approves this product category.
However, analysts say that this development is unlikely to have a significant impact on the price of BTC in the short term. The court decision “is unlikely to speed up the timeline for SEC approval as there is still potential for an appeal,” CoinShares research manager James Butterfill said in a statement.
Butterfill also noted that August's price drop “highlights Bitcoin's vulnerability from large transactions, which is exacerbated by current low volumes.” He said that BTC transaction volume, which was $7.5 billion last summer, averaged $4 billion a day this summer.
He attributed this decline to several factors, including investors holding their coins in anticipation of ETF approval, regulatory pressures on US exchanges, and the end of Binance's fee reduction.
Historically, September has been a poorly performing month for BTC. According to Eric Crown of Krown Trading, “nine out of the previous 13 September saw negative returns and average -12.80% loss rate from open to close.” Sharing this observation on X, Crown warned investors about potential downward pressure.
Sergei Gorev, risk manager at YouHodler, also expects trading volume and volatility to increase in September. Gorev said traders will liquidate more positions in light of the U.S. fiscal year ending next month.
Despite the gloomy outlook in September, analysts are more optimistic about BTC's prospects in October and November. Butterfill said he expects central banks to change positions soon as macro data worsens, which will be more supportive for BTC.
“Still, timing is difficult and we may have to wait until October and November for this scenario to materialize,” he added.
*This is not investment advice.