Crypto Remains 2024’s Best Asset Despite Q3 Dip

Even though the third quarter was tough, Bitcoin has been very strong in 2024, continuing to be the best-performing currency. A new report from the New York Digital Investment Group (NYDIG) says that Bitcoin made a small 2.5% gain in Q3, after going down in the previous three months. This makes the growth so far this year an amazing 49.2%. Bitcoin is still doing very well, even though the market is under a lot of pressure.

Market Dynamics And Challenges In Q3

This year was no exception to the common perception that the third quarter of the year is a challenging time for Bitcoin. The cryptocurrency encountered numerous obstacles, such as substantial sell-offs by significant holders.

It is important to note that the US and German governments sold off significant quantities of Bitcoin, which dramatically affected market sentiment. Furthermore, the resolution of long-standing bankruptcies, such as Mt. Gox, resulted in the return of billions of dollars in Bitcoin to creditors, which further influenced prices.

Despite all the difficulties Bitcoin faced—a month usually marked with decreases for the digital asset—it exceeded expectations in September with a 10% increase. Though other asset classes, such gold and equities, were performing well, Greg Cipolaro, the research director of NYDIG, pointed out that Bitcoin’s ability to maintain its position as the top asset is remarkable. The analysis underlined that during the past six months, Bitcoin’s price has moved between $65,000 and $54,000 with no clear pattern.

ETF Inflows Fostering Growth

The demand for US spot exchange-traded funds (ETFs) has been a substantial factor in the support of Bitcoin’s price during this period. In Q3, these ETFs received a total of $4.3 billion in inflows, with BlackRock’s iShares Bitcoin Trust taking the lead.

This injection of capital has allowed Bitcoin to find new means of supporting the price in periods of larger market volatility. Conversely, exchange-traded funds based on Ethereum have struggled to generate anywhere close to the same level of interest.

BTC market cap currently at $1.22 trillion. Chart: TradingView.com

The growth of ETF investment continues to be on an upward curve, showing confidence from investors in the growing potential of cryptocurrencies as a decent asset in light of somewhat fluid and volatile conditions within the economic setup. Mainstream markets are still sound although indices such as the S&P 500 have recently shown improvements. It is for this reason that Bitcoin’s position diverges uniquely and really helps multi-asset portfolios to provide diversification benefits.

Image: StormGain

Future Prospects: Potential Catalysts

As we head into Q4, analysts see great promise for Bitcoin. Historically, the top crypto has had a good run over this period. One of numerous possible triggers that can raise prices, Cipolaro noted is the approaching US presidential election on November 5. If former President Donald Trump, who has shown support for cryptocurrencies, wins, Bitcoin stands to gain greatly.

Moreover, global monetary easing and stimulus measures from countries like China could further influence Bitcoin’s trajectory in the coming months. While some investors may feel frustrated with Bitcoin’s range-bound trading over recent months, Cipolaro reassured them that this is not unusual for this time of year.

Featured image from StormGain, chart from TradingView