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Bitcoin lags stocks and bonds in the second quarter of 2024
Analysts have reported that Bitcoin failed to deliver in the second quarter of 2024, falling behind stocks and bonds in terms of performance.
According to Bloomberg, Bitcoin underperformed global equities, fixed income and commodities this quarter. The flagship cryptocurrency lost about 5% from early April until mid-June.
After reaching a maximum of $73,798 attempts to retake the position occurred in March it failed to materialize.
In the previous quarter, Bitcoin had risen 67% in the three months through March. Comprehensively outperforming traditional asset indices.
One of the main reasons that fueled the movement was the advertising hype around the approval of US Bitcoin exchange-traded funds (ETFs).. However, this enthusiasm appears to be fading, according to Noelle Acheson, author of the Crypto Is Macro Now newsletter.
Acheson believes the inflow of new funds into Bitcoin ETFs has slowed. He attributed most of the recent inflows to existing Bitcoin holders, adding that “only new money will move the price.”
Raising more than $15 billion to date, Bitcoin ETFs have been one of the most sought-after investment vehicles on Wall Street.
Strategists at JPMorgan Chase noted that there has been a rotation of funds from digital portfolios on exchanges to new ETF products. With this in mind, they estimated that this year’s net flow into cryptocurrencies, including ETFs and other sources, will be $12 billion.
The estimate is much lower than the $45 billion recorded in 2021 and $40 billion in 2022.
With that, strategists concluded they remain “skeptical” about the pace of inflows continuing through the remainder of 2024.
Acheson also estimates that Bitcoin miners may have contributed to the cryptocurrency’s lackluster performance.
Miners have been selling their cryptocurrency holdings to stay afloat. With the halving in April there was a notable drop in profitability. The current halving has dramatically reduced the block reward from 6.25 BTC to 3.125 BTC.
In May, cryptocurrency mining analytics firm Hashrate index revealed that miners will face a “sharp upward difficulty adjustment” in the coming months. Before that, the research firm Kaiko had warned of impending selling pressure from miners.
“If miners were forced to sell even a fraction of their holdings over the next month, it would have a negative impact on markets,” the firm wrote at the time.
Despite the performance slump, some analysts remain bullish on Bitcoin.
AS reported by crypto.news, analyst CryptoCon predicted a year-end price target of $91,539 for the top cryptocurrency. Galaxy Digital’s Michael Novogratz guesses a similar range to $100,000.
Meanwhile, Ark Invest’s Cathie Wood has the most optimistic outlook, having pushed her long-term price target for Bitcoin higher to as much as $3.8 million.