NYDIG Predicts Bitcoin Will See Massive Bullish Actions In Q4
NYDIG's research head, Greg Cipolaro, stated in an October 4 note that Bitcoin, while still leading the pack, has witnessed a narrowing of its advantage.
Despite a “seasonally weak” third quarter, Bitcoin remains the top-performing asset of 2024, according to the New York Digital Investment Group (NYDIG). The cryptocurrency saw a modest 2.5% gain in Q3, rebounding from a second-quarter slump. However, large-scale sell-offs, including those from the United States and German governments, hampered its growth.
NYDIG’s research head, Greg Cipolaro, stated in an October 4 note that Bitcoin, while still leading the pack, has witnessed a narrowing of its advantage. Despite a year-to-date gain of 49.2%, Bitcoin has been largely rangebound for the past six months, facing headwinds from events like the Mt. Gox and Genesis creditor distributions, totaling nearly $13.5 billion.
During this period, precious metals and certain equity sectors have outpaced Bitcoin, with most asset classes experiencing a “banner year.” Despite this, Bitcoin bucked its typical September trend, achieving a 10% increase – a month historically known for bearish performance.
Bitcoin Global Market Driving Factors
Factors driving this resilience include consistent demand from US spot exchange-traded funds (ETFs), which garnered $4.3 billion in total flows during the quarter. Additionally, companies like software firm MicroStrategy and crypto miner Marathon Digital have increased their Bitcoin holdings.
Cipolaro observed a rise in Bitcoin’s rolling 90-day correlation with US stocks during Q3, reaching 0.46. However, he maintains that Bitcoin’s diversification benefits remain significant, as the correlation, while increasing, remains low.
The crypto market received a boost towards the end of Q3 due to political developments, including former President Donald Trump’s endorsement of the crypto industry, global monetary easing through the Federal Reserve’s rate cuts, and China’s central bank introducing stimulus measures and expanding the money supply.
Cipolaro predicts that the US election on November 5 will significantly influence Q4 market performance, with a potential for larger gains if Trump secures victory. He believes that, while both candidates offer improvements over the Biden administration’s stance on crypto, Trump’s full support of the industry could translate to more substantial gains for the asset class.
As Q4 traditionally marks a bullish period for Bitcoin, Cipolaro highlights several potential catalysts for continued growth. He emphasizes that despite the frustration with rangebound trading over the past six months, Bitcoin’s current position mirrors its performance at the same point in previous cycles, suggesting a path for future growth.
