Bitcoin remains the best-performing asset in 2024, despite a weak third quarter, according to a report by the New York Digital Investment Group (NYDIG). Greg Cipolaro, head of research at NYDIG, noted that Bitcoin (BTC) saw a 2.5% gain in Q3, even though the cryptocurrency faced challenges like large sell-offs. So far this year, Bitcoin has experienced a significant year-to-date increase of 49.2%, though its lead has slightly narrowed.
For the past six months, Bitcoin trading has been rangebound, largely due to various headwinds. Some key challenges included large sell-offs related to creditor distributions from Mt. Gox and Genesis, which combined to account for $13.5 billion. Governments in the United States and Germany also sold off a substantial amount of Bitcoin during this period.
Despite these issues, Bitcoin still managed to buck the trend in September by gaining 10%, a month usually known for being bearish for the cryptocurrency. Cipolaro highlighted that other assets, such as precious metals and certain equities, have also seen strong performance in 2024, but Bitcoin remains a top performer.
One of the factors helping Bitcoin is the growing demand from U.S. spot exchange-traded funds (ETFs), which attracted $4.3 billion in flows during Q3. Additionally, corporate entities like MicroStrategy and crypto miner Marathon Digital increased their Bitcoin holdings, contributing to the asset’s stability.
Cipolaro also pointed out that Bitcoin’s 90-day rolling correlation with U.S. stocks increased to 0.46 during Q3, but he emphasized that this still allows Bitcoin to offer diversification benefits to multi-asset portfolios.
Looking ahead, Cipolaro is optimistic about Bitcoin’s performance in the fourth quarter (Q4), which has historically been a bullish period for the cryptocurrency. He noted several potential catalysts for a strong Q4, including the upcoming U.S. election. He believes that if Donald Trump wins, the crypto market could see larger gains, as Trump has strongly supported the industry.
Overall, while Bitcoin’s trading has been rangebound recently, Cipolaro reassures investors that Bitcoin is performing similarly to how it did in previous cycles at this time. This suggests that there could be more growth ahead for the cryptocurrency.
