Key Points
- Bitcoin’s Q2 performance lags behind bonds and stocks, trading down by 0.75% at $66,994.
- The demand for Bitcoin products has seen a slight decrease, with net inflows reaching around $15 billion.
After reaching a peak of $74,000 in the first quarter of 2024, Bitcoin has seen a period of price consolidation and a slightly underwhelming performance.
At the time of writing, Bitcoin is trading at $66,994, a 0.75% decrease, with a market cap of $1.320 billion.
Bitcoin’s Underperformance Compared to Traditional Assets
According to a Bloomberg report, traditional financial assets such as stocks and bonds have outperformed Bitcoin this quarter.
While equities, commodities, and fixed-income instruments have all seen positive returns, Bitcoin’s price has dropped by 5% in Q2.
The first quarter saw significant inflows into the Bitcoin ETF, sparking investor interest.
However, these inflows have slowed down, and uncertainty surrounding Federal rate cuts has diminished the potential for a major Bitcoin rally.
Subdued Demand for Bitcoin Products
Strategists from JPMorgan Chase & Co, led by Nikolaos Panigirtzoglou, have examined the demand for Bitcoin products.
These products have attracted approximately $15 billion in net inflows according to Bloomberg data.
The strategists noted a significant shift from digital wallets on exchanges to new spot-Bitcoin ETFs.
Excluding this shift, they estimate this year’s net flow into crypto, including ETFs, venture capital fundraising, and CME Group futures activity, to be around $12 billion.
This is still lower than the $45 billion inflows during the crypto bull rally of 2021, and the $40 billion flows in 2022.
JPMorgan strategists expressed skepticism about whether the current pace of inflows will continue throughout 2024.
The recent selling pressure on Bitcoin is largely due to Bitcoin miner capitulation.
Miners have been selling their BTC aggressively to cope with rising Bitcoin production costs following the recent halving in April.
Sources indicate that the cost of producing one Bitcoin has increased to $77,000.
Bitcoin analyst Rekt Capital suggests that the current Bitcoin price consolidation is beneficial in the long run, as it could ensure a sustained bull run.
Historically, Bitcoin has never experienced a breakout this early after the halving period.
