- Bitcoin remains the top-performing asset in 2024 despite third-quarter volatility.
- Overhangs from large BTC holders, including governments, impacted market sentiment.
- Bitcoin ETFs continue to grow with notable inflows, contrasting with ETH ETFs’ underperformance.
Bitcoin remains the best-performing asset class in 2024 despite a traditionally weak third quarter. According to the New York Digital Investment Group (NYDIG) recent report, BTC posted a 2.5% gain in Q3, rebounding from a dip in the second quarter.
These returns would seem modest, considering the fact that the price of BTC has oscillated between $70K and $54K over the past six months without any major uptrend or downtrend. One major contributor to price action was the resolution of long-lingering bankruptcies, returning billions in BTC to creditors, such as Mt. Gox.
Besides that, both the U.S. and German governments were heavy sellers in the third quarter and thus placed downward pressure on the price of Bitcoin. Still, BTC remains the best-performing asset, outperforming traditional stocks and other metals like gold.
Q3 Seasonality and Bitcoin’s Steady Performance
Historically, the third quarter has been a weak period for BTC; this year was no exception. However, despite this fact and related seasonality, BTC still managed to close Q3 with a slight gain. Usually, BTC underperforms during summer. During September, though, BTC ended the month with a positive return for the first time and broke its usual downward trend during that time of year.
Over the quarter, BTC’s correlation to US stocks increased as well, indicating that while it provides diversification benefits, it entangles a little bit with the general equity market. Its correlation with US stocks finished Q3 at 0.46, higher than its historical average but still below the level at which it would be considered a direct proxy for equities.
Bitcoin ETFs See Growth as ETH ETFs Struggle
Among the most in-focus developments within the Q3 period was the continuing development of various Bitcoin ETFs. US spot Bitcoin ETFs raked in inflows amounting to $4.3 billion, with BlackRock’s iShares Bitcoin Trust leading the charge.
Meanwhile, Ethereum-based ETFs were disappointed with $523 million outflows in their launch quarter. While Bitcoin ETFs remain one of the most desired investment products, such a cold reaction to ETH-ETFs underlines Ethereum’s challenges with attracting institutional capital.
Looking ahead, historical strength for BTC in the fourth quarter and events such as the U.S. presidential election may limit further upside catalysts into its price, especially as overhangs from large holders are cleared out.
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