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Top 5 Takeaways from Uptober + What's Next

Top 5 Takeaways from Uptober + What’s Next

Learn all about the Uptober phenomenon, the historical data supporting it, and the key takeaways from this year's strong month.

Anyone who reads an investment disclaimer knows that “past performance doesn’t predict future results.” But that doesn’t mean you should ignore historical price trends. Groupthink and meme trading can lead to self-fulfilling prophecies while underlying macroeconomic trends can help push prices in specific directions at certain times of the year.

In this article, we’ll look at the “Uptober” phenomenon, the historical data supporting it, takeaways from this past October, and what to expect next.

What is Uptober?

“Uptober” – an amalgamation of the words “up” and “October” – is crypto parlance for October being an incredibly bullish month for the price of Bitcoin and other cryptocurrencies. That’s because, according to CoinGlass data, October has only produced two negative monthly returns since 2013, making it one of the winningest months of the year.

What is Uptober?
Bitcoin monthly returns since 2013. Source: CoinGlass

In a market where meme coins are multi-billion-dollar assets, Uptober’s performance could be a self-fulfilling prophecy as the threat of buyers pushes short sellers onto the sidelines. After all, retail investors play a more critical role in the crypto markets than in the stock and bond markets, where institutional investors hold the most sway.

5 Takeaways from Uptober

#1. Bitcoin Rose 30% in Uptober

Bitcoin prices rose about 30% from $26,900 on October 1 to $34,465 on October 31, making “Uptober” another success in 2023 for the largest cryptocurrency. Most of these gains came amid hopes that the SEC would approve the first spot Bitcoin ETF, which could bring a fresh wave of retail and institutional investors into the crypto universe.

Bitcoin Rose 30% in Uptober
Bitcoin performance during Uptober. Source: CoinMarketCap

Looking ahead, many traders are watching for a sustained break above the psychologically important $37,000 level. Meanwhile, the expiration of Bitcoin options could lead investors to push the spot market higher in an effort to move them in-the-money. The fear and greed index also hit its highest levels since November 2021 in recent weeks.

#2. Ethereum Prices Rose a Bit Less

Ethereum prices rose just under eight percent from $1,680 on October 1 to $1,809 on October 31, which is less impressive for the second-largest cryptocurrency. Like Bitcoin, there are rumors that a spot Ethereum ETF could lead to a surge in interest among retail and institutional investors and increase prices long-term.

Ethereum Prices Rose a Bit Less
Ethereum performance during Uptober. Source: CoinMarketCap

In November, a Delaware entity named BlackRock Advisors registered an iShares Ethereum Trust, potentially signaling an intent to launch a new fund. In recent weeks, the altcoin responded by breaking through the psychologically important $2,000 level.

#3. Altcoins Broadly Rose, Too

Bitcoin and Ethereum are the most impactful cryptocurrencies from a market capitalization lens, but they weren’t exclusively responsible for the Uptober rally. According to CoinMarketCap, the value of all cryptocurrencies (excluding Bitcoin and Ethereum) rose nearly 10% from $351.16 billion on October 1 to $384.65 billion on October 31.

Altcoins Broadly Rose, Too
Crypto market performance during Uptober. Source: CoinMarketCap

#4. Solana Was the Strongest Performer

Solana (SOL) appreciated approximately 70%, making it the top-performing major altcoin during Uptober. In addition to the overall bullish sentiment in the crypto markets, Solana’s price rose after imposing a weekly sale limit of $100 million on the 55.75 million SOL tokens that the Delaware Bankruptcy Court approved the sale of following the FTX liquidation.

#5. Several Catalysts May Have Helped

Uptober’s performance may be self-fulfilling to some extent, but several catalysts could have helped push prices higher throughout the month. While rumors of a spot Bitcoin ETF topped the list of catalysts, several other noteworthy events occurred throughout the month.

Some of these events included:

  • The SEC did not appeal the favorable court decision in the Grayscale case, which involves the SEC’s refusal to convert GBTC into an ETF. Upon conversion into an ETF, GBTC could trade on national exchanges, like the NYSE or NASDAQ, rather than over-the-counter, broadening its appeal to potential investors.
  • BlackRock laid the groundwork for a spot Bitcoin ETF by registering a ticker symbol with the DTCC in late October. Meanwhile, Fidelity’s amendment to its spot Bitcoin ETF in mid-October suggested that the SEC held active discussions with ETF issuers. When combined, these developments indicate a spot Bitcoin ETF could be imminent.
  • Grayscale Investments partnered with FTSE Russell to launch new crypto indexes, providing more mainstream market visibility. In addition to providing visibility, these indexes could eventually serve as the basis for ETFs. They include currency, smart contracts, financials, utilities, and consumer indexes.
  • The first Ethereum futures ETFs, including Bitwise, ProShares, and VanEck options, hit the market in early October. While the spot ETF market remains a challenge, Bitcoin futures have already seen a lot of success in the financial markets. Adding Ethereum could provide more mainstream exposure to the price of crypto assets.
  • Ferrari began accepting crypto payments for its vehicles in mid-October, saying it wants to test the expanding universe. The move comes after Tesla discontinued accepting crypto payments for its vehicles, citing the dirty power consumption of proof-of-work cryptocurrencies like Bitcoin.
  • Australia proposed a new licensing regime for crypto exchanges, with draft legislation expected next year, further legitimizing the market. The country’s new rules aim to protect consumers from crypto risks while ensuring it’s competitive with other countries worldwide.
  • BlackRock CEO Larry Fink said Bitcoin’s recent appreciation was partly due to a “flight to quality” in the face of the situation in Israel and terrorism concerns. These comments suggest that the financial industry may increasingly view Bitcoin as a safe haven asset along the lines of gold or other precious metals.

Rektember & Moonvember

October isn’t the only month named for its influence on cryptocurrency prices.

Rektember – combining “September” with “rekt” or “wrecked” – tends to bring down months for cryptocurrency prices. And, if you look at the chart earlier in our article, you can see that these trends tend to be true. However, in 2023, Bitcoin prices rose about four percent during September while the overall market followed in lockstep.

Meanwhile, Moonvember could prove to be even bigger this year. Some experts predict that Bitcoin could reach its Q4 highs during November before experiencing some profit-taking following the significant rise throughout October. And notably, November tends to be a strong month for conventional financial assets, like stocks.

The Bottom Line

Cryptocurrencies had a successful Uptober in 2023. In addition, the potential for a spot Bitcoin ETF and other developments could extend the rally into the rest of the fourth quarter. But while history suggests October and November are generally successful months, past performance is no guarantee of future results, so traders would be wise to tread carefully.

If you trade crypto assets, consider next year’s tax season. The IRS treats crypto as “property,” which means you typically owe capital gains taxes on any value increases. Fortunately, platforms like ZenLedger can help you aggregate transactions across wallets and exchanges and generate the forms you must file yearly.

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This material has been prepared for informational purposes only and should not be interpreted as professional advice. Please seek independent legal, financial, tax, or other advice specific to your particular situation.

Justin Kuepper