Bitcoin Retains Lead as Best-Performing Asset Despite Weak Q3

Bitcoin remains the top-performing asset in 2024, despite a “seasonally weak” third quarter, according to the latest analysis from the New York Digital Investment Group (NYDIG). The cryptocurrency saw a modest 2.5% gain during Q3, bouncing back after a decline in the previous quarter. However, large-scale sales, including government sell-offs from the U.S. and Germany, limited its performance, noted NYDIG’s Head of Research, Greg Cipolaro, in a report published on October 4.

“Bitcoin is still the best-performing asset class in 2024, though its lead has narrowed,” Cipolaro stated, highlighting a year-to-date return of 49.2%.

Over the past six months, Bitcoin’s trading has remained rangebound, constrained by significant headwinds. These include the distribution of nearly $13.5 billion worth of Bitcoin from Mt. Gox and Genesis creditors, which has weighed heavily on market activity.

While Bitcoin continues to lead, Cipolaro observed that other asset classes, including precious metals and select equity sectors, have also posted strong returns. Despite broader market gains, Bitcoin bucked historical trends by increasing 10% in September, a typically bearish month for the digital asset.

Several factors contributed to Bitcoin’s resilience. Demand from U.S. spot exchange-traded funds (ETFs) remained robust, attracting $4.3 billion in inflows during the quarter. Additionally, corporate investment in Bitcoin has grown, with companies like MicroStrategy and Marathon Digital expanding their holdings.

Bitcoin’s correlation with U.S. equities rose during Q3, reaching a 90-day rolling correlation of 0.46, Cipolaro noted. However, he emphasized that this level remains relatively low, affirming Bitcoin’s continued value as a diversification tool within multi-asset portfolios.

Political and macroeconomic developments also played a role in Bitcoin’s performance toward the end of Q3. These include former President Donald Trump’s endorsement of the cryptocurrency industry, easing monetary policies from the Federal Reserve, and stimulus measures by China’s central bank. Looking ahead, Cipolaro suggested that the outcome of the U.S. election on November 5 will have a significant impact on market sentiment, with a Trump victory potentially driving greater gains for Bitcoin.

source