Bitcoin and U.S. Equities Experience Strong September

Bitcoin (BTC) and U.S. equities saw one of their best Septembers in years, defying typical trends. Analysts from QCP Capital highlighted various factors that may continue to foster this risk-on sentiment going forward.

Market Performance Overview

As the third quarter wraps up, both assets outperformed expectations, with the S&P 500 increasing approximately 1.5% in September and 5.1% in the third quarter—its best year-to-date performance since 1997. Bitcoin rose over 7% this month, poised for a record September performance, contrasting its historical average loss of about 6%.

According to historical data, a prosperous September usually indicates higher prices in October, November, and December. Since 2013, only two Octobers have seen bitcoin close with negative monthly returns—in 2014 and 2018.

Outlook for October

Looking towards October, QCP Capital remains optimistic about bitcoin, suggesting that a breakout above $70,000 could spark further increase. They cited several favorable indicators, including significant gains in China’s benchmark stock index following new economic stimulus measures from Beijing. Additionally, a recent Goldman Sachs report indicated hedge funds are buying U.S. tech and media stocks at an accelerated rate since the Federal Reserve adjusted its monetary policy.

“China’s CSI 300 Index jumped by 9% after unveiling its largest property support package in years, and hedge funds are significantly betting on IT stock rallies,” noted the analysts.

Despite their positive outlook, QCP Capital acknowledges potential challenges for the recent equity rally, particularly surrounding quarterly earnings announcements in mid-October, which may lead to a reassessment of speculative valuations. Nonetheless, they believe bitcoin will remain resilient as a risk-on asset, likely benefiting from any equity market pullback amid global monetary easing.