The price of Bitcoin (BTC) is still up by 27% in 2020 despite the recent poor performance recorded in June.
BTC Up by 27% YTD
Year-to-date (YTD), the price of BTC is up by 27% as the cryptocurrency trades just above the $9,000 mark. This means that Bitcoin has outperformed several traditional financial assets so far this year.
At the moment, the gold price is up by 16% so far this year, while the U.S Dollar Index that tracks the value of the dollar against other major currencies is up by 5.4% so far in 2020. According to data from Skew, the S&P 500 index and oil prices are down YTD by -5.5% and -34.22%, respectively.
Although the performance of Bitcoin looks impressive so far this year, it has underperformed in June compared to the other leading financial assets. At the moment, the Bitcoin price is down by roughly 3% since the $9,444 it started trading at the start of June. This decline in the BTC price came after it surged by 34% and 9.5% in April and May, respectively.
The chairman and co-founder of Three Arrows Capital, Kyle Davies, stated that the market is in a post-halving price action lull. However, investors and on-chain activity on the Bitcoin network remains very strong.
The Bitcoin network conducted the third mining reward halving on May 11. Several cryptocurrency proponents expected the event to accelerate the price gains of Bitcoin. However, strong buying pressure is yet to be achieved, with the price of the leading crypto restricted to trading between the $9,000 and $10,000 range for the past two months.
Investors remain confident about the potential of Bitcoin. Most of them have been investing in bitcoin-based exchange-traded instruments, such as Grayscale’s Bitcoin Trust (GBTC), which is currently the largest by assets under management (AUM).
Davies noted that Grayscale recorded subscriptions of 19,000 Bitcoin over the past two weeks, Davies’ firm remains one of the biggest public shareholders of GBTC. The investment trust bought 1.5 times the overall number of coins mined since the halving event of May 11.
Despite the poor performance of the Bitcoin price in June, several investors remain bullish about the long-term potential of the asset. For example, a percentage of BTC’s circulating supply that has not moved for the past 12 months, has now surged to a record high of 61.59%. This is higher than the previous lifetime high of 61.13% that was recorded in January 2016.
Analysts at Glassnode pointed out that data suggests that we are currently in a period of sustained HODLing. The last time such a figure was obtained was in early 2016, prior to the bull run of BTC that led to the price reaching its all-time high around $20,000.
On-chain activity is also on the rise due to the recent massive growth in decentralized finance (DeFi). Bitcoin tokenized on the Ethereum platform has surpassed 11,000, and the Ethereum network fees have reached record highs because of Tether and DeFi transactions, Davies added. This will have an impact on market prices.
Despite the strong data supporting a likely Bitcoin bull run, seasonal patterns still affect the market. Over the past six years, Bitcoin has posted losses in the third quarter for four years. In most cases, the negative performance in Q3 is always preceded with good performances in April and May.