NYDIG Reports- Surges 49.2% Year-to-Date: Insights from NYDIG’s Q3 Report
NYDIG Reports– Bitcoin has emerged as the top-performing asset of 2024, despite experiencing a seasonally weak third quarter, according to the New York Digital Investment Group (NYDIG). As of now, Bitcoin (BTC) is priced at $63,160.86, having gained only 2.5% over Q3. This modest recovery followed a decline in the second quarter, hindered by significant sell-offs, as noted by NYDIG’s research head, Greg Cipolaro, in an October 4 report.
Bitcoin remains the best-performing asset class this year, although its lead has diminished, Cipolaro remarked, highlighting a year-to-date increase of 49.2% for the cryptocurrency. Over the past six months, trading has largely been range-bound, influenced by major factors like the Mt. Gox and Genesis creditor distributions, which together accounted for approximately $13.5 billion in sell-offs from both the U.S. and German governments. Meanwhile, other assets, including precious metals and certain equity sectors, have outperformed Bitcoin, with many asset classes enjoying a banner year.
Interestingly, Bitcoin defied seasonal trends by increasing 10% in September, a month that typically sees bearish sentiment. This performance can be attributed to several factors, including strong demand from U.S. spot exchange-traded funds (ETFs), which attracted $4.3 billion in total flows during the quarter. Additionally, corporate ownership of Bitcoin has risen, particularly from software firm MicroStrategy and crypto miner Marathon Digital.
Cipolaro also pointed out that Bitcoin’s 90-day rolling correlation with U.S. stocks has been increasing, ending Q3 at 0.46. Despite this rise, he emphasized that Bitcoin remains a solid option for diversification within multi-asset portfolios. While Bitcoin’s correlation with equities has risen, the current level is still relatively low, suggesting significant diversification benefits, he explained.
Towards the end of Q3, the crypto markets gained momentum due to various political developments, including former President Donald Trump’s support for the crypto industry, global monetary easing initiated by the Federal Reserve, and stimulus measures from China’s central bank, which increased the money supply.
Looking ahead, Cipolaro noted that the upcoming U.S. election on November 5 could significantly influence market performance in Q4. He anticipates more substantial gains for Bitcoin if Trump secures a victory. Both candidates are expected to have a more favorable stance on crypto compared to the Biden administration, but if Trump wins, he could deliver even greater gains for the asset class due to his strong endorsement of the industry, he stated.
Cipolaro also highlighted that Q4 is traditionally a bullish period for Bitcoin and identified several catalysts that could lead to similar trends as seen in the past.
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