Bitcoin’s dynamics have changed markedly in 2024: Ecoinometrics reports a narrowing gap between Bitcoin and NASDAQ.
Year to date, Bitcoin has risen by 34%, while the NASDAQ rose 20%, reflecting a narrowing trend between the two. Despite a surge earlier in the year, Bitcoin has faced stagnation and increased volatility, especially since March.
However, key economic and market factors will keep both assets in focus throughout the year.
Divergence in performance and activity at the beginning of the year
For context, both Bitcoin and the NASDAQ were in gradual upward trends at the start of 2024. Bitcoin experienced a more impressive rally between late January and early February, largely due to the launch of Bitcoin spot ETFs in the United States. This momentum catapulted Bitcoin returns to over 60% by early March.
In contrast, the NASDAQ has maintained a more moderate but consistent upward trajectory, lagging behind Bitcoin’s rapid rise. Despite the slower pace, the NASDAQ has remained stable, closing with YTD up 20% to date, although the summer months have been challenging for both assets.
Mid-Year Consolidation and Bitcoin Stagnation
Since March, Bitcoins performance was marked by repeated cycles of decline and recovery. Although it remained ahead of the NASDAQ, its gains had been steadily fading since its peak in March.
This period of consolidation reflects the lack of major catalysts for Bitcoin as market volatility continued throughout the summer.
Notably, the NASDAQ has also struggled, particularly with declines from June to August. Both assets entered August with positive YTD figures, although their future paths appear uncertain.
Bitcoin Volatility Potential and Prospects
As the year progresses, attention now turns to macroeconomic factors. Ecoinometrics highlights the Federal Reserve’s willingness to cut interest rates, which is generally seen as a favorable move for risk assets like Bitcoin.
However, warnings of a US economic recession persist, creating uncertainty about Bitcoin’s trajectory for the rest of the year.
Meanwhile, seasoned analysts like Peter Brandt point out that Bitcoin is currently undergoes the longest period without reaching a new historical maximum after the halving.
Despite this, some market watchers, including Thomas Lee of Fundstrat Global Advisors, are forecasting Bitcoin to rise to higher levels, possibly to $200,000 or more, citing cyclical patterns and global liquidity dynamics.
