Key Points
- Despite market challenges, Bitcoin has outperformed other assets in 2024, according to a NYDIG report.
- Bitcoin’s performance is influenced by factors such as US spot exchange-traded funds and institutional ownership.
Despite facing significant market challenges, Bitcoin has managed to maintain its dominance over other asset classes in 2024. A recent study by the research division of the New York Digital Investment Group (NYDIG) has confirmed this, showing that Bitcoin has gained 49.2% in value year-to-date.
Although its lead over other assets has narrowed in the third quarter (Q3) due to a downturn in the market, Bitcoin still managed to gain 2.5% in Q3.
Bitcoin’s Resilience Amid Market Challenges
Large sell-offs and impacts from Mt. Gox and Genesis creditor distributions, which totalled around $13.5 billion, have had a significant effect on Bitcoin. Furthermore, sizeable Bitcoin sales by the US and German governments have also influenced its performance.
Despite these challenges, Bitcoin has continued to outpace other assets, reinforcing its position as the leading cryptocurrency. Greg Cipolaro, NYDIG’s research head, noted that Bitcoin managed to defy the trend in September, a historically bearish month, by adding an impressive 10% to its value.
Cipolaro suggested that the rising demand for US spot exchange-traded funds (ETFs), which accumulated $4.3 billion in total flows for the quarter, played a significant role in Bitcoin’s continued relevance. Institutional ownership by firms such as MicroStrategy and Marathon Digital has also contributed to Bitcoin’s performance.
Looking Forward to Q4 2024
According to NYDIG’s research, other assets, including precious metals and certain equity products, have made noticeable gains against Bitcoin, indicating a highly competitive investment landscape. However, Cipolaro maintains that Bitcoin still offers considerable diversification benefits to multi-asset portfolios due to its relatively low correlation with other asset classes.
Cipolaro’s outlook for Bitcoin’s performance in Q4 is optimistic, based on the historical trend of Q4 being a bullish period for Bitcoin. Several potential catalysts and indicators, including the upcoming US election on November 5, are expected to influence market performance.
Cipolaro suggests that a win for Donald Trump, who has shown a positive attitude towards Bitcoin, could result in larger gains for the cryptocurrency. Bitcoin’s price has been showing signs of recovery recently, with a 2.72% increase over the past 24 hours to $63,666.
