Bitcoin's September Gain Outpaced by Smaller Cryptos in Month-End Surge
Bitcoin rose by about 7% in September, outperforming the S&P 500's flat performance and gold's 6% decline. However, several smaller cryptocurrencies surpassed Bitcoin's gain. NEAR surged by 186.6%, while Arbitrum climbed 137.1%. The price of Bitcoin wrapped up the month at $83,995 on September 30.
The turnaround in the crypto market can be attributed to the lower-than-expected August inflation report. This news led to a brief drop in Treasury yields, making cash and bonds less attractive. As a result, some investors redirected their funds towards cryptocurrency, leading to a rally fueled by short covering.
However, this type of rally can lose momentum once short positions close, relying on genuine buyers to sustain the price movement. Bitcoin's September gain came from institutional and corporate buyers, including US spot Bitcoin ETFs that attracted around $2.4 billion in five days and Strategy, which bought 1,665 BTC for $143 million.
NEAR and Arbitrum led smaller coins past Bitcoin in September, causing its share of the total crypto market to drop to 58.4% of the $2.88 trillion market cap. Other significant cryptocurrencies also outpaced Bitcoin during this period, with Ethereum up 9.8%, XRP up 9.9%, and Solana up 16.2%.