Bitcoin could hit a $74,000 record high this month if its October winning streak continues

By Frances Yue

Bitcoin could reach a new record high above $74,000 this month, fueled by seasonality that favors the cryptocurrency and a bullish macroeconomic setup, according to some analysts.

October is historically bitcoin's best performing month since 2014, according to Dow Jones Market Data. The largest crypto by market capitalization (BTCUSD) has seen an average return of 19.4% in October since 2014. If bitcoin records a similar return this month, it would take the token above its all-time record high of $73,798 reached in March, noted analysts at crypto trading firm QCP Capital.

Bitcoin has only recorded negative performances in two Octobers since 2014 and has not posted a loss in any October since 2018, when it fell 4%.

The macroeconomic setup also appears bullish for bitcoin, as investors expect global liquidity to increase as the Federal Reserve and other central banks as poised to deliver further interest-rate cuts - a dynamic which is likely to give bitcoin a lift.

Fed-funds futures traders are pricing a 49% likelihood that the Fed will deliver a further 75 basis points in rate cuts by the end of the year, after the central bank cut the fed-funds rate by 50 basis points earlier this month to a range of 4.75% to 5%.

The upcoming U.S. presidential election in November is also viewed as bullish for bitcoin, as Republican nominee and former President Donald Trump has vowed to build a bitcoin reserve in the U.S., while Democratic nominee and Vice President Kamala Harris recently also signaled support for the crypto industry.

Still, geopolitical tensions have added to the risks facing bitcoin, as its price declined on Tuesday after Iran launched a missile attack on Israel. Bitcoin's fall on Tuesday again showed that the token has been trading as a risk asset, and not as a store of value as many bitcoin bulls have hoped for, said David Lawant, head of research at FalconX.

Yet traders' optimism is reflected on the options market, where bitcoin call options with strike prices at $70,000 and $75,000 by Oct. 25 have seen by far the most volume, according to analysts at Kaiko Research.

A call option gives the contract owner the right, but not the obligation, to buy the underlying asset at a specified price by the expiration date.

-Frances Yue

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10-02-24 0600ET

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