Bitcoin: No summer lull, but rotation — what September may bring Historically, in post-halving years, bitcoin has often posted strong gains. The truly explosive move has not yet materialised. Year to date, as at 3 September, bitcoin is up around 17 to 18%. Is the real fireworks display still to come? No summer lullIn mid-July, the bitcoin price jumped within days to almost USD 120,000. In mid-August, the dominant cryptocurrency even set a new all-time high above USD 124,000. Social media quickly fuelled hopes that bitcoin might soon reach USD 150,000. As a result, long positions increased — with many private investors using leverage to bet on further gains.All-time high on leverageThe expected late-summer follow-through failed to appear — for good reason. Looking at capital flows into bitcoin shows why: while the network saw short-term growth (red line in figure 1), new inflows were mostly subdued — and liquidity even fell at times over August (blue line in figure 1).Figure 1: The red line shows network growth on Bitcoin; the blue line shows capital inflows into bitcoin. Source: SwissblockFrom a fundamental perspective, this calls for caution. If little net new capital flows into bitcoin, the market struggles to sustain prices at new levels. The network growth in this phase likely reflects the activity of speculators opening long positions in search of quick profits.Demand is soft The softer flow picture is also visible in bitcoin-treasury companies and bitcoin ETFs. Since the end of July, inflows and outflows in the large spot ETFs have largely offset one another — with positive and negative days alternating.Figure 2: Inflows to and outflows from bitcoin ETFs were broadly balanced in August. Source: CoinglassThe number of bitcoin-treasury companies continues to rise: more than 170 listed firms now hold bitcoin on their balance sheets. Across these firms, holdings added between 1 July and end-August amount to 147,895 BTC. Importantly, some newly created treasury vehicles — such as the Bitcoin Standard Treasury Company founded by cryptographer Adam Back — received a substantial share of their holdings as seed capital contributed by existing large holders (so-called “whales”). That is not new money, but long-held balances moved into a corporate structure. The great rotationAnother reason for recent bitcoin weakness is the ongoing rotation from bitcoin into ether. For the first time in this bull-market cycle, ether has at times absorbed more fiat capital than bitcoin (figure 3).Figure 3: The orange area shows capital rotation into bitcoin; the blue area shows rotation into ether. As in late phases of previous cycles (2017, 2021), rotation into ether currently exceeds that into bitcoin. Source: CheckonchainOne bitcoin whale caused a stir: within just five days, this player swapped around 22,000 BTC — worth more than USD 2 billion — into ETH on the decentralised exchange Hyperliquid and now holds about 545,000 ETH. That equals around 0.45% of the total ether supply. This makes the whale one of the largest individual holders worldwide; they hold more ether than exchanges such as Bybit and Bitstamp and more than twice as much as Ethereum’s founder, Vitalik Buterin. September seasonality on the wayInvestors are also focused on the seasonally weak prospects for September. The month is historically soft — also for other risk assets such as equities. In every post-halving year (2013, 2017, 2021), bitcoin delivered a negative monthly performance in September.Figure 4: Bitcoin tends to perform negatively in September. Will it be the case again this time? Source: CoinglassThe causes are not monocausal; they are a mix of structural, psychological and macroeconomic factors. Part of the weakness acts like a self-fulfilling prophecy: many market participants expect losses — and trade accordingly. Structural and macro drivers add to this. In the United States, 30 September is fiscal year-end for many funds. To realise losses or secure gains, positions are closed — adding selling pressure. There is also a dry spell in corporate share buy-backs (blackout phase) in September. Buy-backs usually provide steady demand; when they pause, a key source of demand fades. Another factor is the planned build-up of the US government’s cash balance (Treasury General Account, TGA) to around USD 850 billion by month-end. That withdraws liquidity, to which bitcoin — a barometer of liquidity — tends to react sensitively. Altcoin season in sight? Given the rotation into ether and the muted September outlook, it is understandable that the bitcoin price is struggling. The price still trades above the average entry level of short-term holders, which sits at just under USD 109,000. As long as bulls defend this level, the uptrend remains intact. Rotation away from bitcoin is also weighing on bitcoin dominance — although a short-term rebound in September cannot be ruled out.If the crypto market picks up in the fourth quarter — historically not unusual, as the final months of the year are often a favourable period — a sustained outperformance by ether and potentially other altcoins could take shape.For an altcoin season to unfold, the following ingredients are key:A stable bitcoin priceCapital rotation into altcoinsPrior relative strength in EthereumGrowing ecosystems in other coins (rising TVL inflows)Whether all these factors align remains to be seen. At present, the odds are not bad. Autor: Pascal HügliPascal Hügli, Crypto Investment Manager bei Maerki Baumann und Gründer von Insight DeFi, produziert hochwertige Inhalte zu Bitcoin und Krypto und trägt damit auch zur Entwicklung von Maerki Baumann im Bereich der Blockchain- und Kryptowährungen bei. Als Dozent für digitale Finanzen und Krypto-Assets an der HWZ Hochschule für Wirtschaft Zürich verfügt er über fundiertes Fachwissen auf diesem Gebiet, das er nun auch für die Etablierung unserer Marke «ARCHIP by Maerki Baumann» einbringt. Wichtige rechtliche HinweiseWICHTIGE RECHTLICHE HINWEISE: Diese Publikation dient ausschliesslich Informations- und Marketingzwecken. Sie stellt keine Anlageberatung oder individuell-konkrete Anlageempfehlung dar. Sie ist kein Verkaufsprospekt und enthält weder eine Aufforderung noch ein Angebot oder eine Empfehlung zum Erwerb oder Verkauf von Anlageinstrumenten, Anlagedienstleistungen oder zur Vornahme sonstiger Transaktionen. Maerki Baumann & Co. 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