Bitcoin Leads 2024 Asset Performance Despite Weak Q3 Says NYDIG

Bitcoin Leads 2024 Asset Performance Despite Weak Q3 Says NYDIG

Bitcoin remains the top-performing asset of 2024 despite experiencing a sluggish third quarter, according to a report by the New York Digital Investment Group (NYDIG). The cryptocurrency recorded a modest 2.5% gain during Q3 but has managed an impressive year-to-date increase of 49.2%, continuing to outpace other asset classes.

Greg Cipolaro, NYDIG’s head of research, acknowledged Bitcoin's resilience amid headwinds like creditor distributions from the Mt. Gox exchange and Genesis, totaling $13.5 billion, along with significant Bitcoin sales by the U.S. and German governments. These factors contributed to market pressure, narrowing Bitcoin’s lead over other asset classes such as precious metals and certain equity sectors.

Market Resilience Amid Headwinds Despite these challenges, Bitcoin defied expectations, particularly in September, a month historically associated with bearish trends for the cryptocurrency. It posted a 10% gain during the month, supported by growing demand for U.S. spot exchange-traded funds (ETFs), which attracted $4.3 billion in inflows.

Corporate interest also played a role in Bitcoin’s performance, with companies like MicroStrategy and Marathon Digital increasing their Bitcoin holdings. This corporate demand helped to sustain Bitcoin’s upward momentum through Q3.

Cipolaro also noted Bitcoin’s increased correlation with U.S. stocks, which reached 0.46 by the end of the quarter. While this correlation rose, Cipolaro emphasized that it remains relatively low, allowing Bitcoin to continue offering diversification benefits to multi-asset portfolios.

Political and Market Influences In addition to market factors, the broader crypto market received support from key political developments, including former President Donald Trump’s endorsement of the cryptocurrency industry, monetary easing measures from the Federal Reserve, and liquidity-boosting efforts from China’s central bank.

Looking ahead, Cipolaro pointed out that the upcoming U.S. presidential election on November 5 could significantly impact the market. He suggested that Trump’s victory might lead to larger gains for the cryptocurrency sector due to his favorable stance on the industry.

Despite the challenges, Cipolaro concluded that Q4 is historically a bullish period for Bitcoin, and with favorable factors aligning, the asset could see further gains by year-end.