Bitcoin Reigns Supreme Despite Q3 Market Dip: NYDIG Findings
Bitcoin Rises 2.5% in Q3 Amid $13.5B Sell-Offs, Maintains Top-Performing Asset Status with 49.2% YTD Gain.
Key Takeaways:
- Bitcoin gained 2.5% in Q3, recovering from Q2 losses despite heavy sell-offs.
- The asset faced $13.5 billion in sell-offs from Mt. Gox and Genesis creditor distributions.
- Despite challenges, Bitcoin remains the top-performing asset of 2024, with a 49.2% Year-to-Date (YTD) gain.
A recent report from the New York Digital Investment Group’s (NYDIG) research division has revealed that Bitcoin remains the top-performing asset of 2024 despite a sluggish third quarter (Q3). The cryptocurrency gained 2.5% in Q3, recovering from earlier losses but held back by heavy sell-offs. Despite these challenges, Bitcoin's year-to-date gain of 49.2% surpasses other assets.
US & German Government Sell-offs Weighed Heavily on Bitcoin Performance
NYDIG’s research head, Greg Cipolaro, noted in an October 4 report that Bitcoin's performance in Q3 faced significant pressure caused by large sell-offs from the US and German governments and creditor distributions from the collapsed Mt. Gox and Genesis platforms.
Altogether, these factors added up to $13.5 billion worth of Bitcoin, creating market headwinds for the popular cryptocurrency.
Despite the challenges, Bitcoin showed resilience, particularly in September, a month typically marked by bearish trends. Cipolaro noted that Bitcoin managed to gain 10% during this period, defying expectations.
BTC gained over 10% in September
One key reason for this uptick was continuous demand from US spot exchange-traded funds (ETFs), which saw inflows of $4.3 billion throughout the third quarter and growing corporate ownership of Bitcoin, with companies like MicroStrategy and Marathon Digital further supporting the asset’s market position.
Bitcoin's correlation with US stocks increased over the same period. According to Cipolaro’s report, the 90-day rolling correlation between Bitcoin and US equities rose to 0.46 by the end of the third quarter.
However, Cipolaro quickly pointed out that this correlation remains relatively low, meaning Bitcoin still holds considerable potential as a diversification tool in multi-asset portfolios.
The crypto's ability to maintain independence from traditional markets is seen as a positive for investors looking to spread risk across different asset classes.
Q4 Optimism for Bitcoin Performance
The latest Bitcoin performance recovery aligns with positive US jobs data, where 254,000 jobs were added in September, exceeding forecasts and boosting confidence in the US economy.
As the economic outlook brightened, Bitcoin's performance benefited from the overall market optimism.
Looking forward, Cipolaro remains optimistic about Bitcoin’s performance in the fourth quarter, which is traditionally a strong period for cryptocurrency. One key factor is the upcoming US presidential election on November 5, which could impact the market.
He suggested that the election outcome might have a noticeable impact on the crypto market, with Donald Trump's potential victory as a key factor that would likely lead to bigger gains for Bitcoin and other assets.
As the year draws to a close, all eyes are on the market to see how these factors will shape Bitcoin's trajectory into the Q4.
Jimmy Aki
Drawing from his background in economics, Jimmy has monitored blockchain development for years, firmly believing in its power to democratise finance. Beyond offering commentary on the latest crypto developments, he also spends his time analysing open-source codes of promising projects on GitHub. Jimmy holds Bitcoin and Ethereum.
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