BlockByte Weekly: September Slump Ahead? How To Capitalise

Hi Reader,

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Thanks for reading The BlockByte Weekly, where we summarise the key updates in crypto over the last week and provide our perspective on what you need to know as an investor.

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Weekly Snapshot

• BTC: US $108,818 (-6.9%)
• Crypto Market Cap: US $3.73T (-6.7%)
• Gold: US $3,446/oz (+3.2%)
• S&P 500: 6,460 (-0.6%)
• ASX 200: 8,973 (-0.5%)
• 10-Year Treasury Yield: 4.23% (-0.03%)

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Executive Summary

It's been another highly volatile week for the digital asset market with Bitcoin falling 6.9% and Ethereum down 9.8% - the overall market was ~6.7% lower for the week.

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On average, September is the worst month for returns in both crypto and the stock markets. The reasoning why isn't completely clear, but a few factors appear to be:

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• Funds year-end selling: September is when many U.S. funds rebalance and tax-loss harvest.
• Return from summer: Institutional investors come back, boosting volumes and volatility.
• Macro calendar: Big Fed meetings, CPI, and U.S. budget deadlines cluster in September.
• Psychology & history: Past poor performance in September may make investors cautious, reinforcing the pattern.

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Solana largely bucked the trend and held steady over the course of the week as investor narrative shifted from Ethereum. Solana has several spot ETFs pending approval in October later this year along with several companies announcing plans for billion dollar Solana treasuries.

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Lastly, on balance the ETFs have been net buyers during the dips and price declines over the week. Interestingly, some of the largest holders of these ETFs are advisors who are actively adding digital assets into client portfolios as they look to move into the sector that is increasingly in demand by clients that are undergoing a generational transfer in wealth.

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From our perspective, we're holding the reins steady going into September, expecting a few potholes and a rough ride, but with a clear eye on the horizon into the latter half of this year. We expect that the opening of the US $9 trillion pension market, pending announcements for adding to the strategic US Bitcoin Reserve, and further rate cuts may deliver a strong end to the year. Investors that are prudent, may look to capitalise on the drawbacks in September as portfolio building opportunities.

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Key Stories This Week

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Worst Month Historically Around the Corner, Best Months to Follow?

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Over the course of the week, most digital assets were in the red, with nearly US $700M in leveraged positions liquidated on Thursday alone.

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As we touched on above, September is historically the weakest month for digital assets, with Bitcoin declining by 3.8% on average, Ethereum's September average is -6.4%. On the bright side, October (+21.9%) and November (+46%) are often the best months for Bitcoin and the broader market. For investors, September may present some strong buying opportunities.

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8 Solana ETFs Pending Approval Spur Investor Confidence

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Solana (SOL) touched as high as US $218 before retracing to end the week flat at ~ US $202. The token is having a strong month, up 14% and is currently outpacing the broader market. October is set to bring as many as eight Solana ETF approvals. In addition, adoption with Multicoin capital among others announcing US $1B SOL treasury plans.

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ETFs Buy the Dip - Driven by Advisors

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Despite crypto markets declining during the course of the week, ETFs have been aggressively buying. Ethereum spot ETFs had net inflows of over US $1.5 billion for the week, despite Friday's US $165 million outflows. BlackRock led earlier in the month with over US $1B in combined BTC and ETH purchases on a single day.

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Bloomberg’s James Seyffart notes that financial advisors are now the dominant holders of spot Bitcoin ETFs, with nearly every investor category boosting exposure in Q2. This suggests institutional demand is not only sustained but diversifying.

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ETF inflows on down days are a good sign of institutional buy in to the crypto sector and serve as structural support. With advisors now some of the largest ETF holders, we may see reduced downside volatility in markets compared to previous years.

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Until next week,
James

James Brannan
Managing Director
BlockByte

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