As an analyst with extensive experience in the digital asset market and a keen interest in Bitcoin (BTC), I find myself consistently impressed by its resilience and leadership over traditional asset classes. Having witnessed the tumultuous ride of the crypto market since its inception, it’s fascinating to see how Bitcoin has managed to weather the storms, emerging stronger each time.
Bitcoin, represented as BTC and currently valued at around $63,634, remains unchallenged atop all other investment classes following its impressive performance this year. According to a recent study by the research sector of New York Digital Investment Group (NYDIG), Bitcoin has seen an increase in value of approximately 49.2% since the beginning of the year. The asset’s 24-hour volatility stands at 2.6%, while its market capitalization totals roughly $1.26 trillion, with a 24-hour trading volume of around $20.60 billion.
In Q3, it seems that its advantage over other assets might have lessened due to a substantial market decline that continued from the losses experienced in Q2.
Bitcoin Gains amid Market Challenges
During the third quarter, Bitcoin saw a minimal increase of 2.5%, but its potential for significant recovery was hindered due to persistent large-scale selling activities.
Bitcoin’s value was significantly influenced by the distributions of funds from Mt. Gox and Genesis, which amounted to approximately $13.5 billion. Additionally, substantial Bitcoin sales were made by both the U.S. and German governments, which also had an impact.
Regardless of the reduction in its previous advantage, Bitcoin (BTC) continued to outperform other assets, reinforcing its status as the dominant ‘cryptocurrency monarch.’
As reported by NYDIG’s research lead, Greg Cipolaro, Bitcoin managed to defy the typical negative trend in September, instead gaining a notable 10% during that period.
Cipolaro mentioned that Bitcoin’s ongoing significance could be due to the increasing interest in US spot exchange-traded funds (ETFs). He pointed out that these ETFs accumulated a total of $4.3 billion during the quarter, which might have significantly boosted the growth observed in Bitcoin.
Furthermore, the ownership of Bitcoin by companies such as MicroStrategy and Marathon Digital is also contributing significantly to its ongoing growth.
Expectations for Q4 2024
Based on NYDIG’s findings, it appears that various assets like precious metals and select equities have experienced significant increases relative to Bitcoin. This implies that the current investment environment may be quite competitive.
Indeed, Cipolaro maintains that Bitcoin continues to provide valuable diversification advantages for mixed investment portfolios, primarily because of its low association with other asset types. To illustrate, during the third quarter, Bitcoin’s 90-day running correlation with U.S. equities grew further, concluding at 0.46 by the end of the period.
Regarding Bitcoin’s anticipated performance in Q4, Cipolaro maintains a optimistic outlook. His perspective is anchored on the historical tendency of Q4 being favorable for Bitcoin, thus this year should follow suit. Additionally, there are several potential triggers and signs that have been set in place.
A significant factor that could shape market behavior is the U.S. election happening on November 3rd (not November 5th, my apologies for the mistake).
According to Cipolaro’s perspective, if Donald Trump were to succeed, it could lead to significant profits given that Trump has wholeheartedly endorsed Bitcoin. In simpler terms, he believes that a Trump victory might result in increased value for Bitcoin.
As a researcher examining the potential impact of presidential candidates on the cryptocurrency market, I can assert that both contenders are likely to represent an improvement over the current Biden administration’s stance towards digital assets. However, should Trump secure victory, I believe the crypto sector stands to reap more substantial benefits, primarily due to his unwavering support for the industry.
In the past few days, Bitcoin’s price appears to be on an upward trend. According to current information from Coinspeaker, it has increased by approximately 2.72% within the last 24 hours, reaching a value of around $63,666.
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2024-10-07 11:41