Lawrence Damilola
Bitcoin has remained the top-performing asset of 2024 despite challenges in the third quarter, according to a report from the New York Digital Investment Group (NYDIG).
The report, issued last friday, noted that Bitcoin recorded a modest 2.5% gain during Q3, recovering from a decline in the second quarter. However, the cryptocurrency faced persistent selling pressure throughout the period.
“Bitcoin is still the best-performing asset class in 2024, but its lead has narrowed,” said Greg Cipolaro, head of research at NYDIG. He added that Bitcoin has experienced a 49.2% year-to-date increase, reflecting its resilience despite market challenges.
Bitcoin encountered several headwinds during the third quarter. These included creditor distributions from the Mt. Gox exchange and Genesis, amounting to nearly $13.5 billion, which added to market pressure. Cipolaro also noted that sales by the U.S. and German governments further contributed to the selling environment.
Alongside these challenges, other asset classes, such as precious metals and certain equity sectors, have seen strong gains in the year. “Most asset classes have had a banner year,” Cipolaro remarked, acknowledging the strong performance across different sectors.
Despite a traditionally weak September performance, Bitcoin managed to achieve a 10% gain during the month. The report attributed this positive result partly to growing demand for U.S. spot exchange-traded funds (ETFs), which saw $4.3 billion in inflows during the quarter. Increased corporate interest in Bitcoin also provided support, with companies like MicroStrategy and crypto miner Marathon Digital contributing to the upward trend.
Additionally, Bitcoin’s correlation with U.S. equities rose slightly during the period. Cipolaro noted that the rolling 90-day correlation between Bitcoin and U.S. stocks increased to 0.46 by the end of Q3. Despite this rise, he emphasized that the correlation remains relatively low, allowing Bitcoin to offer diversification benefits in multi-asset portfolios.
Political developments also influenced market sentiment in the latter part of Q3. According to Cipolaro, factors such as former President Donald Trump’s endorsement of the cryptocurrency industry, combined with monetary easing measures from the Federal Reserve and stimulus efforts from China’s central bank, provided a favorable backdrop for the market.
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Lawrence does not hold any crypto asset. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
