Bitcoin Remains the Best-Performing Asset Class in 2024 Despite Weak Q3 Gains, Says NYDIG

Bitcoin gained 2.5% in Q3 2024, per NYDIG, with ETF inflows and corporate adoption rising.

Bitcoin’s third-quarter performance in 2024 saw a modest gain, according to a detailed analysis by NYDIG, a financial services and infrastructure firm. Per the analysis, the crypto posted a 2.5% recovery following a previous decline in the second quarter. Despite this rebound, Bitcoin’s price remained confined to a narrow range, trading between $70,000 and $54,000 over the past six months. 

The report emphasized that while the crypto struggled to make significant upward moves, it demonstrated resilience in a challenging market environment. This report caught the attention of the crypto community.  The head of research at Uphold, Martin Hiesboeck, reiterated a statement by NYDIG that Bitcoin remains the best-performing asset class in 2024 regardless of the weaker Q3 performance.

#Bitcoin is “still the best performing asset” class in 2024 despite weak Q3: NYDIG pic.twitter.com/DHT5gYIdzk

— Dr Martin Hiesboeck (@MHiesboeck) October 7, 2024

Market Influences and ETF Activity

NYDIG’s analysis highlighted key developments that affected Bitcoin’s price in the third quarter. The resolution of major bankruptcy cases, notably the Mt. Gox proceedings, led to the return of substantial amounts of Bitcoin to creditors. This, combined with significant sales of Bitcoin by the U.S. and German governments, exerted pressure on the asset.

NYDIG suggests that the anticipation of these coins entering the market had a more substantial impact on Bitcoin’s price than the actual sales themselves. 

On the other hand, exchange-traded funds (ETFs) played a positive role, with U.S. spot Bitcoin ETFs drawing $4.3 billion in inflows. BlackRock’s iShares Bitcoin Trust emerged as the top contender, significantly outperforming competitors. However, Grayscale’s introduction of its Bitcoin Mini Trust added to the competitive landscape, although its effect on Grayscale’s larger operations was felt.

New Developments in ETFs 

The report also pointed to disappointing results for Ethereum-based ETFs, which saw $523 million in outflows during their first quarter of launch. NYDIG attributes the underperformance to a lack of strong catalysts and Ethereum’s different use case compared to Bitcoin.

However, corporate involvement in Bitcoin continues to grow, with companies such as MicroStrategy increasing their Bitcoin holdings to a total of $15.2 billion. Marathon Digital also added $249 million worth of Bitcoin to its balance sheet.

Other firms, including Semler Scientific and Metaplanet, adopted Bitcoin treasury strategies, contributing to corporate ownership growth during the quarter.

Anticipated Impact of Regulatory Changes

In a recent interview, Mike Novogratz, CEO of Galaxy Digital, indicated that the approval of options trading for Bitcoin ETFs could significantly boost demand. He also highlighted the ongoing inflows into Bitcoin ETFs, which he predicts will continue over the coming years. 

Looking ahead, regulatory clarity in the U.S. could accelerate traditional finance’s adoption of crypto and stimulate innovation in blockchain technology. Notably, Novogratz suggested that both the House and Senate are likely to adopt pro-crypto stances, regardless of the outcome of the 2024 U.S. presidential election.