Bitcoin (BTC) has outperformed stocks, fixed income securities, indices, and commodities in terms of overall stability and success this year, exhibiting much lower risk indicators than its counterparts.
The recently released statistics coincide with gold rising and stocks falling. One can see how Bitcoin’s volatility is trending towards multi-year lows and that constant futures open interest and swap funding rates indicate that the rally is not just based on speculation.
On-chain statistics show continued accumulation, long holding periods, and an upward dispersion of ownership. The upcoming fourth quarter is expected to be ahead of the long-term uptrend.
Bitcoin was the best performing asset of 2023 relative to risk-adjusted return compared to stocks, fixed income securities, indices and commodities.
Bitcoin’s correlation to stocks has been high for the past 18 months, but has recently declined. Meanwhile, its correlation to gold has moved up significantly, especially since the banking challenges.
There are two possible Bitcoin supply scenarios on the horizon: one that looks bullish and one that may be bearish. Speculation is that the fourth halving, which is expected to happen in the spring of 2024, will cause inflation to fall below one percent, a lower rate than previously seen. Galaxy notes that the drop in daily new releases may have less of an impact than previously assumed.
The early distribution date is in September, and it is expected that not a large amount of BTC will be sold during the distribution. A second-order impact could be on the BTC lending markets if lenders seek to lend their BTC to an office or network through a WBTC-to-WBTC conversion method.
Ethereum is virtually unchanged
On the other hand, Ethereum was below $1,800 for the second session in a row.
ETH/USD fell back to $1,725.02 in one day after trading as high as $1,788.14.
Despite the recent bullish crossover of the volatile 10-day and 25-day averages, the trend appears to have reversed.
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