Bitcoin falls behind stocks and bonds in Q2 of 2024
Experts have raised concerns about Bitcoin’s lackluster performance in the second quarter of 2024, with stocks and bonds outperforming the cryptocurrency.
According to Bloomberg, Bitcoin has not been able to keep up with global equities, fixed income, and commodities this quarter, experiencing a decline of around 5% from April to mid-June.
Following a peak of $73,798 in March, Bitcoin’s attempts to regain its position have fallen short. In contrast, the cryptocurrency had seen a remarkable 67% surge in the previous quarter, surpassing traditional asset indexes by a wide margin.
The excitement surrounding the approval of US Bitcoin exchange-traded funds (ETFs) was a major driver of the price surge in the first quarter. However, enthusiasm seems to be waning, as noted by Noelle Acheson, author of the Crypto Is Macro Now newsletter.
Acheson suggests that the influx of new funds into Bitcoin ETFs has slowed down, with most recent inflows coming from existing Bitcoin holders. She emphasizes that only new investors can truly impact the price of Bitcoin.
Bitcoin ETFs have attracted over $15 billion in investment so far, making them a highly sought-after investment vehicle on Wall Street. JPMorgan Chase strategists have observed a shift of funds from digital wallets on exchanges to these new ETF products, estimating a net flow of $12 billion into crypto assets this year, significantly lower than previous years.
Analysts remain cautious about the pace of inflows for the rest of 2024, with some attributing Bitcoin’s lackluster performance to miners selling off their holdings to offset reduced profitability after the April halving.
Despite these challenges, some analysts remain optimistic about Bitcoin’s future performance. Analyst CryptoCon predicts a year-end price target of $91,539, while Galaxy Digital’s Michael Novogratz anticipates a similar range around $100,000. Ark Invest’s Cathie Wood has the most optimistic outlook, setting a long-term price target for Bitcoin at an impressive $3.8 million.
