Does Seasonality Still Matter in Crypto?

Does Seasonality Still Matter in Crypto?

By:  Alex Tapscott,  Managing Director of the Ninepoint Digital Asset Group, a division of Ninepoint Partners, and Portfolio Manager of the  Ninepoint Crypto and AI Leaders ETF  at Ninepoint Partners

Cryptoassets are highly reflexive: market perception regularly influences prices, thus changing perceptions. This cuts both ways. When the market thinks an event will have a positive impact on the price, such as the Bitcoin halvening, when the Bitcoin block reward get halved, prices typically follow. To wit, at the last halvening in April 2024, the price of Bitcoin was $64,000. Since then, it has risen by 70%. Every single halvening event has been followed by a sharp move upward.

As the price of Bitcoin goes up, it induces more people to buy in. The last halvening timed up perfectly with the launch of ETFs in the U.S., giving investors a convenient way to play the trade. People on X.com joke and debate about whether the 'halvening is priced in,' but buying BTC on the halvening has been a winning strategy.

Reflexivity cuts the other way too. One area where this plays out is with the concept of seasonality. Crypto investors did not invent the concept that asset prices behave differently depending on the month/season etc. In traditional finance, every spring you hear the cliche "Sell in May and Go Away." Never mind that there is zero evidence that this is a good strategy, it still gets trotted out. I have always been pretty skeptical of seasonality, just as I am skeptical of horoscopes. Mercury is in retrograde, sell your NVIDIA! Huh?

But with crypto, I am more sympathetic, given the highly reflexive nature of the market and the (borderline irrational) faith that investors put on these heuristics and assumptions.

Our friends at Bitwise put together a helpful research report that touched on seasonality, highlighting the point with this chart:

Source: Bitwise Weekly Crypto Market Compass

(https://bitwiseinvestments.eu/blog/regular-updates/Bitwise_Crypto_Market_Compass_2025_36/)

So, is 'Downtember' (sorry I don't come up with these names), an inevitability? Should we all heed Greenday's advice and ask "wake me up when September ends?" 

Though I loathe this expression, it's probably true that t his time is different. Markets have been consolidating all summer long. Rate cuts are coming soon. Fund flows into ETFs and DATs remain strong, with crypto ETFs experiencing $35 billion of YTD net inflows and DATs eclipsing $15 billion in fundraising in that same period, and in the next few weeks, we'll likely get clarity on a Solana ETF. A wave of crypto companies has gone public with more coming. This broadening investment universe will likely draw in new buyers. September is back to school month. So sharpen your pencils and don't doze off.

Join Alex Tapscott as he decodes the world of crypto with special guest Jim Hiltner, Co-Founder and Head of Business Development at Superstate. Listen in as they discuss the accelerating adoption of tokenized real-world assets by issuers and investors worldwide, the Superstate origin story and its evolution, how tokenization democratizes access to U.S. dollar investment accounts, Superstate’s USTB and USCC onchain investment funds, its Opening Bell platform that enables public companies to tokenize their shares and why it stands out from other market offerings, Galaxy Digital’s move to tokenize its GLXY shares on Solana using Opening Bell this past week, the future of capital markets and the role of blockchains in reshaping access to capital and financial infrastructure, how Superstate evaluates which networks to issue assets on, and more.

Given this past week’s tokenization-heavy theme, we wanted to take a look at the current state of the tokenized RWA market. Excluding stablecoins, the market is now close to $30 billion, up an incredible 80% YTD and 115% Y/Y. The largest asset class is private credit, which makes up just over half of the market. The main issuer here is Figure. Founded in 2018 by SoFi co-founder Mike Cagney, Figure is a California-based fintech platform that uses blockchain to originate, fund, and trade loans. Its flagship product is a home equity line of credit, and to date the company has originated more than $17 billion in loans across 200,000 homes. Like Gemini, Figure has recently filed a Form S-1 to list on the Nasdaq under the ticker FIGR. It’s targeting a post-IPO valuation of roughly $4.3–$4.6 billion, which would raise about $526 million in gross proceeds at the high end of the range. The next two largest tokenized asset classes by AUM are U.S. Treasuries and commodities. Altogether, there are just over 270 issuers of tokenized products and 375,000 holders of these tokenized RWA products. While Figure’s assets are hosted on its own Provenance Blockchain, most of the rest of the market is based on Ethereum (53%) and ZkSync Era (15%), with the remaining spread across several other networks. And with the U.S. SEC recently launching Project Crypto to bring financial markets onchain, we think the growth of this market will be explosive in the years to come.

Chart 2:  Extreme Bitcoin Volatility is Breaking Down, Institutional Allocation Anchors Market

One of the most common critiques of Bitcoin from traditional investors is that it’s plagued by extreme volatility. We wanted to dig into this to separate fact from fiction. Looking at the chart, over the past decade, Bitcoin’s price has trended up and to the right, setting new highs, while its volatility has come down dramatically. That said, Bitcoin is still more volatile than traditional assets: its 30-day annualized volatility sits around 35%, compared to 10.6% for the S&P 500 and 12.6% for gold. Still, as the trend line shows, Bitcoin’s volatility has dropped massively and is now sitting at multi-year lows. So what does this all mean? For emerging markets, especially in tech, high volatility is normal early on as excitement drives big rallies and big sell-offs. Past crypto cycles were mostly retail-driven, which led to wild booms and busts. But this cycle looks different. Put simply, crypto’s boom-bust cycles may be fading. Regulation is reducing blow-up risk, enterprise adoption is strengthening network effects, and institutional capital is anchoring the market. The asset class is maturing in all the right ways. In fact, Bitcoin’s historically low volatility was highlighted in a JPMorgan research note last week. The analysts looked at Bitcoin’s historical volatility to gold’s and concluded that, on a volatility-adjusted basis, Bitcoin’s fair value could reach about $126,000 by year-end.