Bitcoin Leads Asset Class Performance Despite Q3 Slump, NYDIG Expects Strong Q4

• Despite a Q3 slump, Bitcoin remains the top-performing asset of 2024 with a 49.2% year-to-date increase.
• NYDIG expects a strong Q4 for Bitcoin, driven by institutional demand and potential political catalysts.

Bitcoin has once again proven its position as the best-performing asset class of 2024, even after a challenging third quarter, according to the latest report from the New York Digital Investment Group (NYDIG). Historically, October has been a favorable month for Bitcoin, with previous bull runs starting during this period, as previously reported by CNF.

While the cryptocurrency saw only a modest gain of 2.5% during Q3, its overall year-to-date increase stands at 49.2%, keeping it ahead of other asset classes, despite the narrowing gap.

Q3 Pressures and Resilience

Several factors contributed to Bitcoin’s limited growth in Q3. Significant sell-offs, driven by creditor distributions from Mt. Gox and Genesis—amounting to $13.5 billion—put pressure on its price.

Additionally, large-scale sales from the US and German governments further weighed down its performance. Despite these challenges, Bitcoin showed strength in September, rising by 10%, a notable performance given that this month has historically been a downturn for the asset.

Institutional Demand and Q4 Outlook

As presented in a graph by NYDIG below, Cipolaro attributes Bitcoin’s steady performance to sustained demand from US-based spot exchange-traded funds (ETFs), which attracted $4.3 billion in flows during the quarter. Increased corporate interest, particularly from firms like MicroStrategy and Marathon Digital, also contributed to Bitcoin’s market resilience.

Source: Q2 2024 Review and Look Ahead

Looking ahead, Q4 has traditionally been a favorable period for Bitcoin, and multiple factors could drive further gains. Cipolaro highlights potential catalysts, such as upcoming political events, including the US presidential election. A win by Donald Trump, who has voiced strong support for the crypto industry, could drive significant market growth.

While Bitcoin’s correlation with equities rose in Q3, it still offers valuable diversification for portfolios, acting as an attractive hedge in the current financial landscape.

According to CoinMarketCap data, Bitcoin (BTC) is currently trading at $63,220.45, with an increase of 1.76% in the past day after a slight decrease of 0.89% in the past week. See the BTC price chart below.