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'The Uptober Effect': History Says Bitcoin is About to Heat Up

October is Bitcoin’s Best Performance Month

Since its debut in May 2010, Bitcoin has been the best-performing asset class – by far. In fact, Bitcoin is estimated to have gained a mind-boggling 11 billion percent from its earliest tracked price of approximately $0.00099. However, throughout the past decade and a half of Bitcoin’s history, there have been several devastating drawdowns of 80% or more. In other words, Bitcoin’s meteoric price rise has not been easy to hold in hindsight. Returns have been anything but steady, instead come in bunches with dramatic volatility in between.

While market timing can be challenging, Bitcoin tends to perform better in some seasons and worse in others. As we approach a new month, it’s worth noting Bitcoin’s robust track record during the month of October and into the fall season. Since its debut in 2010, Bitcoin has been green in October ~73% of the time. Meanwhile, returns have been robust, averaging 29.23%.

Zacks Investment Research
Image Source: Zacks Investment Research

Meanwhile, November is also a strong month historically for Bitcoin. While Bitcoin tends to be less volatile in October than November, November’s average returns are a robust 37.64%. Seasonally speaking, the current time is the optimal moment to buy Bitcoin from a seasonal perspective.

Crypto Will Benefit from Government Tailwinds

During President Donald Trump’s first term, he was fairly neutral on Bitcoin and the crypto industry. However, after The Trump Organization was allegedly ‘debanked’ by mainstream banks like JPMorgan ((JPM - Free Report) ), President Trump warmed up to the crypto industry, seeing it as a means of keeping overreaching bans in check. In Trump’s current administration, crypto transformed into a priority. Thus far in his second term, President Trump has appointed a ‘Crypto Czar,’ fired anti-crypto Securities and Exchange Commission (SEC) Chair Gary Gensler, and passed two pro-crypto bills (the CLARITY Act & the GENIUS Act).

For crypto companies like Coinbase ((COIN - Free Report) ), regulatory clarity is a big deal. However, the Trump Administration is striving to do more with crypto than provide clear regulations. US Treasury Secretary Scott Bessent views stablecoins like Circle Group’s ((CRCL - Free Report) ) USDC as a means of maintaining dollar supremacy, financing the US debt, and increasing demand for US treasuries. Meanwhile, though controversial, Trump and his family have ‘skin in the game’ with three new crypto-related ventures. Whether you believe such businesses are ethical or not, they ensure that Trump has more than enough motivation to ensure that the crypto industry continues to flourish.

Interest Rate Cuts Benefit Bitcoin

At the last FOMC meeting, Fed Chair Jerome Powell finally cut interest rates by 25 basis points after a long period of pause. Interest rate cuts are often a bullish catalyst for crypto assets and proxies such as the iShares Bitcoin ETF ((IBIT - Free Report) ) and the iShares Ethereum Trust ((ETHA - Free Report) ) because lower benchmark rates make borrowing cheaper, leading to increased liquidity into risk-on assets. Additionally, lower interest rates can lead to a weaker dollar, making Bitcoin (a hedge against currency debasement) more attractive.

Bitcoin Technical View

Bitcoin has been rangebound since late July. However, on Tuesday, Bitcoin attempted to retake its intermediate-term 50-day moving average. Should the IBIT ETF break out of the current range, the Fibonacci extensions suggest a minimum price target of ~$75.

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

The stage is set for a significant move higher in Bitcoin. Between the robust historical performance of October and November, the new regulatory clarity and backing from the Trump Administration, and the stimulative effect of interest rate cuts, Bitcoin is full of bullish tailwinds.

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