According to Bloomberg, Bitcoin has underperformed global equities, fixed income, and commodities in the current quarter. The cryptocurrency lost about 5% from April to mid-June, a stark contrast to its 67% surge in the previous quarter.
However, enthusiasm for Bitcoin appears to be waning, with existing holders driving most of the recent inflows, according to Noelle Acheson from the Crypto Is Macro Now newsletter. She believes that only new money will significantly impact Bitcoin’s price.
Bitcoin exchange-traded funds (ETFs) have attracted over $15 billion so far, making them highly sought after on Wall Street. JPMorgan Chase strategists noted a fund rotation from digital wallets on exchanges to these ETF products.
They estimated this year’s net flow to crypto, including ETFs and other sources, at $12 billion, significantly lower than the $45 billion recorded in 2021 and $40 billion in 2022. The strategists expressed skepticism about the continued pace of inflows through the rest of 2024.
Acheson also suggests that Bitcoin miners’ sales of their holdings to cover costs may have contributed to the cryptocurrency’s lackluster performance, especially after the April halving which significantly reduced profitability. Some analysts, however, maintain an upbeat outlook on Bitcoin.
Galaxy Digital’s Michael Novogratz envisions a similar price range at $100,000, while Ark Invest’s Cathie Wood has set a long-term price target for Bitcoin at a staggering $3.8 million.
