Insights into the Current State of the Crypto Market: A Focus on Bitcoin and Treasury Cycles

By David Duong, Global Head of Research, Coinbase
Compiled by Tim, PANews

Overview

The crypto landscape is buzzing with optimism as we move toward early Q4 2025. Recent insights suggest that a robust liquidity environment, favorable macroeconomic conditions, and friendly regulatory policies are key drivers supporting this upbeat sentiment. Notably, Bitcoin is projected to continue outperforming market expectations, benefiting from macro tailwinds. The risk of an abrupt shift in U.S. monetary policies appears minimal unless significant fluctuations in energy prices or other inflationary pressures emerge. Meanwhile, technical demand from crypto treasuries is anticipated to uphold market stability.

However, seasonality remains a consistent theme in cryptocurrency performance. Historical trends indicate that Bitcoin’s price faced declines in September for six consecutive years between 2017 and 2022. This led many investors to question the viability of holding crypto assets during this month. Interestingly, this pattern did not hold true for 2023 and 2024, suggesting that the perceived seasonality may not have the weight investors think.

A critical inquiry presently is whether we are in the early or late stages of the crypto treasury cycle. As of recently, public crypto treasuries collectively manage over 1 million Bitcoin, approximately 4.9 million Ethereum, and nearly 8.9 million Solana. Interestingly, late entrants are targeting assets perceived as lower-risk, indicating a possible shift in the market dynamics.

Maintain a Constructive Outlook

At the beginning of the year, predictions leaned toward the crypto market bottoming out in the first half of 2025, with a notable resurgence anticipated in the latter half. This outlook contrasted sharply with prevailing market sentiment, which was filled with recession fears and uncertainty about price movements. Notably, the ongoing macroeconomic evaluation has presented a different narrative, and we stand by our projections.

As we delve into Q4, our outlook remains constructive, buoyed by steady liquidity and positive macroeconomic indicators. Anticipated interest rate cuts by the Federal Reserve, expected on September 17th and October 29th, are seen as potential boosts for capital flows into the crypto sphere. This shift could activate idle funds in the OTC market, substantially impacting the allocation among investors.

Yet, it’s essential to note the caveats. A surge in energy prices could pose significant risks, although ongoing negotiations within OPEC+ regarding oil production provide a sliver of hope. Striking a balance here is crucial, as heightened tensions, such as increased sanctions on Russia, could alter price dynamics unexpectedly.

The Crypto Treasury Story: A Competitive Landscape

The narrative around crypto treasuries signals an important phase of competition and differentiation. Technical demand for crypto assets appears set to continue influencing the market positively. The evolution from early adoption to what’s termed the "Player vs. Player (PvP) phase" marks a significant transition. This era requires players to focus on execution rather than merely replicating successful models like that of MicroStrategy.

In terms of numbers, Bitcoin-focused treasuries currently manage over 1 million BTC, around 5% of the circulating supply, while Ethereum treasuries hold approximately 4.9 million ETH, constituting over 4% of their total supply. Early adopters who once enjoyed premium valuations now find themselves navigating a landscape marked by increased competition and regulatory scrutiny, thus viewing their previous premiums as slowly evaporating.

In August alone, reports indicated that U.S.-listed companies collectively raised about $98.4 billion earmarked for cryptocurrencies—a stark jump from previous figures. This influx is not limited to Bitcoin or Ethereum but extends to altcoins, particularly Solana, showcasing a diversified interest in the crypto treasury space.

Risking Seasonality?

Despite the optimistic outlook, concerns around seasonal performance refuse to dissipate. From 2017 to 2022, Bitcoin consistently depreciated against the U.S. dollar in September, stirring fears among investors that this month spells trouble for risk assets. However, contrary to these beliefs, market performance in 2023 and 2024 has proven otherwise.

Engaging with statistical methods, it becomes apparent that seasonality should not be seen as a reliable trading tool. Various analytical methods, including spectral analysis and logistic regression, have reinforced that the statistical significance of seasonal patterns is weak at best. For instance, confidence intervals demonstrate that potential seasonal indicators are subject to random variance rather than a consistent, predictable trend.

Moreover, research employing out-of-sample forecasts and logistic models illustrates that calendar months lack predictive power for Bitcoin price movements. The findings indicate that trading strategies based on perceived monthly patterns misinterpret underlying trends, often leading to misguided expectations.

Embracing Uncertainty

As the crypto market continues to evolve, stakeholders must also consider the control variables that could impact performance. Analytical assessments have indicated that conventional trading signals tied to specific calendar months do not yield additional advantages. Interestingly, introducing real-world events into forecasts often adds noise rather than clarity.

Market participants may view seasonal factors as entrenched, almost ritualistic beliefs. However, research highlights that aligning trading strategies with the historical baseline probability of price increases could yield better outcomes than reliance on seasonal expectations. This challenges conventional wisdom and opens the dialogue for a more nuanced understanding of market influences.

In short, while the crypto landscape is undeniably complex, insights drawn from statistical analysis and market behavior reveal that navigating it requires a keen, adaptable approach. Rather than adhering to seasonal narratives, stakeholders can benefit from recognizing the stability within long-term trends and adjusting strategies accordingly.