Recent studies show that Bitcoin has much underperformed in the second quarter of 2024, lagging bonds and stocks. Comparatively to the performance of world equities, fixed income, and commodities, Bloomberg notes that the flagship cryptocurrency has witnessed an approximately 5% drop since the start of April.
Comparatively to its first-quarter performance, where it surged 67% from January through March, outperforming conventional asset indices, Bitcoin’s performance in Q2 stands in sharp contrast. The enthusiasm for approving U.S. Bitcoin exchange-traded funds (ETFs) drove most of this earlier increase.
But as the author of the “Crypto Is Macro Now” email, Noelle Acheson notes, that early excitement has faded. With most recent inflows coming from current Bitcoin holders, Acheson argues that the flood of fresh funds into BTC ETFs has halted. She underlined, “Only extra cash will change the price.”
Bitcoin ETFs and Miner Activity Impact Performance
Originally considered a very appealing investment on Wall Street, Bitcoin ETFs have attracted over $15 billion to date. Strategists at JPMorgan Chase have seen cash from digital wallets rotating on exchanges to these new ETF products.
Including ETFs and other sources, they project the overall net flow into crypto this year to be $12 billion—a notable decline from the $45 billion and $40 billion noted in 2021 and 2022, respectively. These strategists remain “skeptical” about the ongoing flow of inflows for the rest of 2024.
The behavior of BTC miners has contributed to the currency’s underperformance. Profitability dropped noticeably after the April halve, which cut the block reward from 6.25 BTC to 3.125 BTC.
Many have sold out their Bitcoin investments to remain functioning as a result. According to crypto mining analytics company Hashrate Index in May, miners would encounter a “hefty upward difficulty adjustment” in the next months. Research company Kaiko had cautioned earlier of the possible selling pressure from miners, saying, “If miners were forced to sell even a fraction of their holdings over the coming month this would harm markets.”
Some analysts still see great promise for Bitcoin despite the current downturn. Analyst CryptoCon on crypto. The news set Bitcoin’s year-end price target at $91,539. Comparably, Michael Novogratz of Galaxy Digital speculates that BTC might hit $100,000. With an amazing $3.8 million future price forecast, Cathie Wood of Ark Invest presents the most positive long-term view.
Although Bitcoin’s performance lately has been unsatisfactory compared to conventional assets, the many projections emphasize the continuous discussion of its possibilities in the next months and years.
