Key Bitcoin risks to watch this September

Bitcoin investors are bracing for September, historically the worst month for cryptocurrency prices. Digital asset platform Matrixport issued a warning, this month Bitcoin could see further decline due to various looming risk factors.

Matrixport highlighted that Bitcoin will face more pressure this year, which may affect its value. In its target matrix, the firm points to several key influences, including the outlook for the US tech sector, Federal Reserve decisions and the upcoming presidential debates, all of which could weigh on Bitcoin's performance.

Key factors influencing Bitcoin's September performance

Matrixport has revealed a strong correlation between AI giant Nvidia and Bitcoin between the end of 2022 and the second quarter of 2024. However, Bitcoin has recently lagged behind the AI ​​Rally, as evidenced by NVIDIA's outperformance. But as both assets are now making lower highs, this suggests that there is a possibility of a deeper correction.

Last week, NVIDIA shares fell 8% despite better-than-expected Q2 earnings. Similarly, the price of Bitcoin has fallen by a similar margin, despite strong inflows into spot ETFs.

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Macroeconomic factors such as US employment data and potential inflation control measures can also affect Bitcoin. Federal Reserve Chairman Jerome Powell has hinted at the possibility of interest rate cuts, boosting optimism among investors who believe lower rates could benefit Bitcoin.

However, Matrixport cautioned that historical patterns suggest a less straightforward outcome. During the 2018/2019 price hike cycle, Bitcoin struggled, but rallied when the Fed stopped raising rates. Eventually, when rates were cut, Bitcoin experienced a brief rally, followed by a gradual decline, interrupted only by further price cuts.

This historical pattern introduces uncertainty in Bitcoin's response to an expected devaluation.

The upcoming US election will add to the uncertainty surrounding Bitcoin. While many in the crypto industry voted for Donald Trump's presidency, Vice President Kamala Harris stepped up his campaign and gained significant support.

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As both candidates are expected to face off in the debate soon, this raises concerns about how the results could affect Bitcoin. The performance of a strong argument could boost the industry due to Trump's pro-Bitcoin stance. Conversely, Harris' victory could introduce further uncertainty, as she has not publicly disclosed her position on the leading cryptocurrency.