Bitcoin’s performance remained resilient in the third quarter of 2024, despite a volatile environment and the return of a substantial amount of Bitcoin to the market. According to Greg Cipolaro, Global Head of Research at NYDIG, Bitcoin achieved a modest 2.5% gain, showing its ability to hold ground amidst challenging conditions.
Bitcoin’s price has fluctuated between $70,000 and $54,000 over the past six months, maintaining a largely rangebound trading pattern. While this has frustrated some investors, Cipolaro points out that it demonstrates Bitcoin’s underlying strength. A significant factor influencing price pressure in Q3 was the resolution of major bankruptcies, including the Mt. Gox case. The redistribution of 204,000 Bitcoins (worth over $12.6 billion) and sales from U.S. and German governments also contributed to the pressure on the market. However, Cipolaro highlights that the fear of these coins hitting the market had a larger effect on prices than the actual sell-offs.
Traditional asset classes outpaced Bitcoin in Q3, benefitting from lower interest rates. Gold hit all-time highs, adding more competition to Bitcoin’s status as a store of value. Still, Bitcoin remains the best-performing asset in 2024, maintaining a lead over equities, gold, and real estate on a year-to-date basis.
Looking ahead, NYDIG is optimistic about Q4. Historically a strong quarter for Bitcoin, Cipolaro identifies catalysts like the upcoming U.S. presidential election as potential triggers for a price surge. According to NYDIG, a Trump victory could offer substantial gains for Bitcoin, but the cryptocurrency could also thrive amidst post-election market instability. Additionally, demand for U.S. Bitcoin ETFs, which pulled in $4.3 billion in total flows, continues to support Bitcoin’s price, with BlackRock’s iShares Bitcoin Trust leading inflows.
Cipolaro concludes that despite the headwinds, Bitcoin is positioned for a robust Q4, thanks to its low correlation with traditional assets, providing unique diversification benefits for investors.
