Key Points
- Minneapolis Fed President, Neel Tushar Kashkari, deems Bitcoin as a worthless asset.
- Despite Kashkari’s remarks, Bitcoin’s performance continues to impress, with increased demand for Bitcoin ETFs.
Neel Tushar Kashkari, the President of the Federal Reserve Bank of Minneapolis, recently expressed his opinion about Bitcoin.
Kashkari stated that Bitcoin remains worthless as an asset class, even after 12 years of existence. He also noted that despite the longevity of cryptocurrency, it has not established itself as a viable form of currency.
Bitcoin’s Remarkable Performance
Contrary to Kashkari’s remarks, Bitcoin has shown impressive performance over the years. It gained 9% in 2012, 59% in 2016, and 171% in 2020.
Thus far in 2024, Bitcoin has outperformed major asset classes. Its volatility has increased as the US prepares for what Jefferies investment firm refers to as the “Bitcoin elections”.
In the past month, Bitcoin has risen by 10% and has surged 48% so far this year.
However, the last quarter of Q3 has been challenging for Bitcoin. It returned flat returns of 0.8% by September end. In contrast, Bitcoin’s rival, Gold, outperformed it with 13.8% gains during the last quarter.
Increasing Demand for Bitcoin ETFs
Despite these challenges, the demand for spot Bitcoin ETFs is growing. This follows a successful launch earlier this year.
Inflows into the BTC ETFs have surged, with $555 million in inflows recorded on one Monday. This marks the largest single-day inflow in four months since June 5, 2024.
This trend clearly indicates that institutional demand for the asset class remains strong, despite all the headwinds.
The upcoming US elections are expected to have a significant impact on the Bitcoin price. Both presidential candidates, Donald Trump and Kamala Harris, have pledged to foster a more crypto-friendly environment to support the growth of digital assets.
Donald Trump, in particular, has been vocal about the topic. At the Bitcoin Conference 2024 in Nashville, Tennessee, he promised to make the US a global hub for cryptocurrency if elected.
Some market analysts believe that a victory for Donald Trump would be very positive for Bitcoin.
Apart from the political scenario, on-chain metrics also support a BTC price rally ahead. According to CryptoQuant data, the Bitcoin reserves on all centralized exchanges (CEXs) are currently at an all-time low.
These declining reserves show that investors are optimistic about the asset and are moving BTC into cold storage for the long term.
Conversely, the Bitcoin open interest is at an all-time high of $19.8 billion. This indicates that traders are building up long positions for BTC.
According to CryptoQuant, “This upward trend in the derivatives market indicates a growing influx of liquidity and increased attention in the cryptocurrency space. The rise in funding rates further points to a bullish sentiment among traders.”
