Bitcoin’s Performance Amidst Decline
In the latest weekly research report by NYDIG, Greg Cipolaro, the Global Head of Research, highlights Bitcoin’s performance in the past quarter. Although its price fell by 11.1% during this period, Bitcoin remains the top-performing asset for the year with a 63.3% year-to-date increase. Cipolaro notes that despite various macroeconomic changes and legal developments, Bitcoin has been trading within a narrow range of $25K to $31K, resisting significant price movements.
The Broader Asset Landscape
It is important to note that Bitcoin was not the only asset to experience a downturn in Q3. Stocks, bonds, gold, and real estate also declined due to factors like high inflation, rising rates, and recession concerns. However, commodities were an exception as oil prices rose due to production cuts by OPEC+ countries.
Year-to-Date Asset Performance
Despite the quarterly decline, Bitcoin continues to outperform other asset classes year-to-date. While stock market indices have dipped from their July highs, they are still up for the year. Bonds have faced challenges due to higher interest rates and inflation. Long-term US Treasuries have been particularly poor performers due to duration risk and credit warnings.
The SEC’s Stance on Bitcoin ETFs
Cipolaro observes that the SEC has been delaying decisions on Bitcoin ETFs and even fast-tracking some postponements. This is happening despite Grayscale’s legal win that has put the SEC’s stance on spot ETFs under scrutiny.
Legal Battles: Grayscale vs. SEC
A legal confrontation between Grayscale and the SEC is ongoing. The DC Circuit Court of Appeals ruled in favor of Grayscale, and the SEC has until October 13 to appeal. The outcome remains uncertain.
Ethereum-Backed ETFs and SEC’s Legal Challenges
Ethereum futures-backed ETFs have been approved but have performed poorly, accumulating only $16.8 million in AUM. This raises questions about the viability of futures-based crypto ETFs. Cipolaro also discusses the SEC’s setbacks in its case against Ripple and mentions that their legal actions against Binance and Coinbase are still in early stages.
Crypto-Related Equities
During the quarter, crypto-related public equities struggled. Crypto companies saw a 1.6% increase primarily driven by Coinbase’s performance, while Bitcoin miners experienced a 22.4% decline.
Hot Take: Bitcoin Remains Resilient Despite Market Volatility
Despite a decline in the past quarter, Bitcoin continues to show resilience as the top-performing asset for the year. Its ability to maintain stability amidst macroeconomic changes and legal battles is impressive. The SEC’s delays on Bitcoin ETF decisions and legal confrontations with Grayscale and other crypto companies add further complexity to the market. As we move forward, it will be interesting to see how these factors impact Bitcoin’s performance and its position within the broader asset landscape.
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