Guide to September’s key events

The Bitcoin and crypto market is entering a very quiet week today in terms of upcoming events. Both crypto-related events as well as notable macro data are very rare this week. The most important macro data is the ISM Services PMI (at 10:00 AM EST on Wednesday) and the initial jobless claims (at 08:30 AM EST on Thursday). However, neither event will have a significant impact on the dollar index (DXY) and therefore Bitcoin and crypto.

Because of this, we’re making an exception this Monday and looking at the entire month of September rather than the upcoming seven days in our weekly preview. September holds several extremely important events, and may also provide a few surprises.

#1 Bitcoin Spot ETF Decision?

The spot Bitcoin ETF approval continues to be the most important catalyst to watch for the market. Grayscale’s recent court victory against the SEC was an important milestone. “The SEC will likely have no choice but to approve mock Bitcoin ETFs following Grayscale’s victory in its case against the SEC”, according to JPMorgan. However, the timing remains questionable.

While the crypto market braces for the second deadline in mid-October, the consensus among analysts is leaning towards another delay by the SEC. The first “final” deadline for Ark is set for January 10. Moreover, the market’s somewhat tepid response to Greyscale’s win, followed by a quick pullback, is evidence of the weariness and anticipation that has built up over time.

However, the Greyscale victory introduced an element of unpredictability. The SEC’s window to appeal the court’s decision closes on October 14, a date that coincidentally coincides with the second deadline for other institutional giants such as BlackRock, Fidelity and Invesco. But while a definitive decision on a Bitcoin spot ETF in September looks like a long shot, the negotiations between Grayscale and the SEC over the implementation of the ruling could potentially produce a surprising turn of events.

#2 US CPI Release on September 13th

The September Consumer Price Index (CPI) report is probably the most anticipated economic indicator this month. Scheduled for release on September 13, this report will shed light on the inflationary trends of the US economy. After a steady period of decline, July’s CPI showed a surprising rise. The financial markets are now in a state of heightened vigilance trying to determine whether this is the start of a new inflationary trend or just an anomaly.

The Federal Reserve’s recent comments on the past two CPI reports were somewhat optimistic. However, Fed Chairman Jerome Powell’s latest comments serve as a reminder of the volatility and unpredictability of economic indicators. If September’s CPI again shows worrisome inflationary trends, the Fed may well be preparing the start for discussions about another potential rate hike in 2023.

In July, CPI rose 0.2% month-on-month on a seasonally adjusted basis, the same increase as in June. Over the past 12 months, the CPI rose by 3.2% year-on-year (YoY). Core CPI rose 0.2% from June and was 4.7% y/y (0.1% below consensus expectation). Remarkably, July was the fourth consecutive month that the annual core CPI eased.

#3 FOMC meeting on September 20th

The meeting of the Federal Open Market Committee (FOMC) on September 20 is another important event in the financial calendar for September. This meeting is particularly important as it follows the recent surge in CPI and the PCE data, which remains stubbornly high at 3.3%. With the Fed’s self-imposed 2% inflation target still out of reach, the market is overwhelmingly leaning toward a pause in rate hikes, with a whopping 93% probability.

Every word uttered by Jerome Powell will be closely analyzed for insights into the Fed’s future strategy. The recent economic data presents a complex picture. On the one hand, the sharp decline in US consumer confidence, along with a decline in jobs and a continued contraction in US manufacturing, paint a bleak picture.

On the other hand, the Fed’s preferred inflation measure, core PCE, rose in line with expectations. Further complicating the story is the temporary rise in core services ex-housing, a measure Powell watches closely. Nevertheless, a pause seems very likely unless the CPI shoots up again.

#4 More Crypto Opportunities

Decentralized exchange dYdX is gearing up for a significant update with the launch of V4 on their Cosmos application chain. One of the standout features of this update is an in-memory order book that will be overseen by dYdX chain validators. In a move that signals a shift towards greater decentralization, trading revenue will no longer be directed to centralized entities such as dYdX Trading Inc.

With a current market cap of $362 million and a fully diluted valuation of $2.09 billion, the upcoming revenue sharing model for DYDX token holders is a significant development. However, potential investors should be wary of the impending 40% breakout of DYDX planned for December.

Coinbase’s Base platform has been making waves in the crypto community. Since its inception, Base has rapidly accumulated a Total Value Locked (TVL) of $400 million. A significant portion of this liquidity ($190 million) is associated with Aerodrome, which has been in the spotlight for its incentivized farms and signs of air debris.

While the current TVL may stabilize at this level, the impending launch of several major protocols on Base may act as a magnet for additional liquidity in September. Notable projects that have already made their mark on Base include industry heavyweights such as Curve, Uniswap, 1Inch and Aave.

At press time, the Bitcoin price was at $25,999.

Featured image from Matt Duncan / Unsplash, chart from TradingView.com