Even though the third quarter was complex, Bitcoin was very sturdy in 2024, still remaining the best performing currency. Recent report of Recent York Digital Investment Group (NYDIG) says Bitcoin saw a modest 2.5% gain in the third quarter, after dwindling in the previous three months. This brings growth so far this year to an incredible 49.2%. Bitcoin continues to perform very well even though the market is under a lot of pressure.
Market dynamics and challenges in the third quarter
This year was no exception to the common belief that the third quarter is a challenging time for us Bitcoin. The cryptocurrency has faced many obstacles, such as significant sell-offs by significant holders.
It should be noted that the US and German governments sold significant amounts of Bitcoin, which dramatically affected market sentiment. Moreover, the resolution of long-running bankruptcies such as Mt.Gox resulted in billions of dollars in Bitcoin being returned to creditors, further impacting prices.
Despite all the difficulties Bitcoin has faced – a month usually marked by declines for digital assets – it exceeded expectations in September, achieving a 10% gain. While other asset classes such as gold and stocks performed well, Greg Cipolaro, director of research NECESSARYpointed out that Bitcoin’s ability to maintain its position as the most critical asset is remarkable. The analysis showed that over the past six months, Bitcoin’s price has fluctuated between $65,000 and $54,000 with no clear pattern.
ETF inflows support growth
Demand for U.S. spot Exchange Traded Funds (ETFs) has been a significant factor supporting Bitcoin’s price during this period. These ETFs received a total of $4.3 billion in inflows in the third quarter, led by BlackRock’s iShares Bitcoin Trust.
This infusion of capital has allowed Bitcoin to find novel ways to support its price during periods of greater market volatility. Conversely, exchange-traded funds based on Ether had difficulty generating anywhere near the same level of interest.
BTC market cap currently at $1.22 trillion. Chart: TradingView.com
ETF investment growth continues to trend upward, demonstrating investor confidence in the growing potential of cryptocurrencies as decent assets in lithe of the rather fluid and volatile conditions in the economic structure. Mainstream markets are still in good shape, although indexes such as the S&P 500 have shown recent improvement. For this reason, Bitcoin’s position is uniquely different and really helps multi-asset portfolios provide diversification benefits.
Image: StormGain
Future prospects: potential catalysts
As we enter the fourth quarter, analysts see great promise for Bitcoin. Historically, top cryptocurrencies have had a good run during this period. Cipolaro noted that one of many possible factors driving prices up is proximity US presidential elections November 5. If former President Donald Trump, who has shown support for cryptocurrencies, wins, Bitcoin could gain significantly.
Moreover, global monetary easing and stimulus measures from countries like China may continue to impact Bitcoin’s trajectory in the coming months. While some investors may feel frustrated by Bitcoin’s circumscribed trading performance in recent months, Cipolaro assured them that this is not unusual for this time of year.
Featured image from StormGain, chart from TradingView
