Analysts have noted that Bitcoin has underperformed in the second quarter of 2024, lagging behind stocks and bonds in terms of performance.

Bitcoin has fallen approximately 5% since the start of April through mid-June. After reaching a high of $73,798 in March, attempts to rally back have not succeeded.

In the previous quarter, Bitcoin had surged 67% through March, significantly outperforming traditional asset indexes. A major driver for this rise was the buzz around the approval of US Bitcoin exchange-traded funds (ETFs). However, that excitement seems to be waning, according to Noelle Acheson, author of the Crypto Is Macro Now newsletter. Acheson believes the inflow of fresh funds into Bitcoin ETFs has slowed. She noted that most recent inflows have come from existing Bitcoin holders, adding that “only new money will move the price.”

Bitcoin ETFs have attracted over $15 billion to date, making them highly sought-after investment vehicles on Wall Street. JPMorgan Chase strategists observed a rotation of funds from digital wallets on exchanges to new ETF products. They estimate this year’s net flow into crypto, including ETFs and other sources, at $12 billion, a significant drop compared to the $45 billion in 2021 and $40 billion in 2022.

Given this, the strategists remain “skeptical” about the pace of inflows continuing through the remainder of 2024. Acheson further estimates that Bitcoin miners may have contributed to the cryptocurrency’s lackluster performance. Miners have been selling off their holdings to stay afloat. The April halving reduced the block reward from 6.25 BTC to 3.125 BTC, significantly impacting profitability.

In May, crypto mining analytics firm Hashrate Index indicated that miners would face a “hefty upward difficulty adjustment” in the coming months. Prior to that, research firm Kaiko had warned of impending selling pressure from miners. “If miners were forced to sell even a fraction of their holdings over the coming month, this would have a negative impact on markets,” the firm had noted.

Despite the slump in performance, some analysts remain optimistic about Bitcoin. Analyst CryptoCon has predicted a year-end price target of $91,539 for the premier cryptocurrency. Michael Novogratz from Galaxy Digital speculates a similar range at $100,000. Meanwhile, Ark Invest’s Cathie Wood has a long-term price target for Bitcoin at an impressive $3.8 million.

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