Good morning investors! Today we’re turning our attention to crypto markets.

What was once seen as a sideshow to traditional finance has become too big to ignore — even BlackRock, Goldman Sachs and other Wall Street behemoths want in on the action.

Let’s dive in.

Bitcoin usually doesn’t win this time of year

Bitcoin is going up when historical trends suggest it’s the time of year to go down. 

The crypto hovered at $65,500 early Friday, up roughly 2.8% in the last 24 hours and near its highest mark since July. 

This month, the world’s biggest cryptocurrency has gained more than 12%, running counter to its typical 5.9% drop in September over the last decade. 

So far in 2024, it’s up about 50%. 

The Federal Reserve’s jumbo interest-rate cut is the most obvious catalyst here. Bitcoin has emerged as one winner through the so-called “Fed pivot.” 

Yet given that bitcoin is a global asset, recent rate cuts from the People’s Bank of China and European Central Bank have also helped. 

Spot bitcoin ETFs, notably, have seen higher inflows over the last several days.

BlackRock’s iShares Bitcoin Trust, for example, saw $185 million of new money hit the fund on Wednesday — almost double the previous day, according to data from Farside Investors.

Now, when you zoom out, the Fed lowered borrowing costs by a nominal amount with its 50-basis-point cut last week.

However, the anticipation alone for a new era of lower interest rates is proving sufficient to drum up demand for assets from crypto and gold to stocks. 

Bitcoin moves in the direction of global liquidity 83% of the time, as strategist Lyn Alden pointed out in a report this week. That’s the highest rate among any major asset class. 

With interest rates set to come down further across major economies, global liquidity — and therefore, bitcoin — should balloon. 

Meanwhile, the S&P 500 has shown a similar rare strength in September, like bitcoin. 

As Opening Bell Daily covered last week, the benchmark index typically sees a 0.7% decline in September dating back to 1948 — it’s the worst month of the year for stocks.

The S&P 500 is up 1.7% this month.

Thoughts or feedback? Hit reply to this email or let me know on X @philrosenn.

Elsewhere:

📊 The S&P 500 notched another record. Thursday marked the third record-high for the index this week, and the Dow and Nasdaq also closed green on the day. Economic data out Thursday saw initial jobless claims drop more than expected, while the latest second-quarter GDP reading came in at 3%. Investors now await the Fed’s preferred inflation gauge, due this morning.

📉 Super Micro stock tumbled. Shares of the Nvidia-competitor traded more than 12% lower Thursday after the Wall Street Journal reported the Justice Department had opened an investigation into the company. Last month, the notorious short seller Hindenburg Research alleged Super Micro had “glaring accounting red flags.” (CNBC)

🇨🇳 China’s stock market is rallying. Thanks to hype from Beijing’s stimulus package, Chinese equities are on pace for their best week since 2008. That said, in early trading Friday, Shanghai’s stock exchange was hit with glitches and delays, potentially signaling strong demand. China’s onshore benchmark has rallied more than 15% over four days. (Bloomberg)

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