Bitcoin Underperforms Nasdaq: What to Expect in Q3

• Bitcoin (BTC) continues to lag behind US tech stocks as Q2 results reveal contrasting performance.
• Concerns arise about BTC following trends into Q3, according to analysts.
• Quinn Thompson of Lekker Capital points to a potential deeper correlation with US tech stocks in the near term.

Explore the dynamics between Bitcoin and US tech stocks amidst evolving market conditions. Discover expert analyses and future projections.

Bitcoin’s Underperformance Against US Tech Stocks in Q2

In the second quarter of 2024, Bitcoin has notably underperformed against US tech stocks, which tracked with significant discrepancies in returns. Data indicates that while the Nasdaq Composite surged by 7%, Bitcoin experienced a 7% decline.

Forecasts and Expert Opinions on Q3 Performance

Quinn Thompson, founder and Chief Investment Officer of crypto hedge fund Lekker Capital, suggests that Bitcoin’s lackluster performance could extend into Q3. He attributes this projection to the negative correlation between BTC and US tech stocks, a trend that might worsen given the current macroeconomic landscape influenced by the Federal Reserve’s hawkish policies.

The Nasdaq Composite, which serves as a barometer for major US tech stocks, typically shows its relationship with Bitcoin through the BTC Pearson Correlation Index. Recent trends recorded a new high for Nasdaq while Bitcoin fell to $65,000. Thompson warns that adverse macroeconomic conditions could further decouple BTC from tech stocks.

Comparative Performance: BTC vs. US Stocks

Over the longer term, Bitcoin has generally outperformed US stocks, maintaining an edge over the past seven years and notably in Q1 2024 with a 67% rise. However, Q2 2024 saw a shift as gold and US bonds outperformed the leading digital asset.

Bloomberg reports JPMorgan’s analysts are skeptical about sustained crypto inflows for the remainder of 2024, a view reflected by the 7% decline in BTC during Q2. Conversely, the Nasdaq Composite and S&P 500 Index exhibited gains of 7.7% and 3.4%, respectively, according to TradingView.

Thompson’s outlook suggests that US tech stocks may continue to lead over Bitcoin in the near term, reinforcing the potential decoupling trend.

Market Sentiments and Future Projections

Year-to-date (YTD) data reveals that Bitcoin still holds a double-digit gain against the single-digit increase of US indices. Nonetheless, Quinn Thompson emphasizes that the Federal Reserve’s recent policy stance could spell trouble for Bitcoin moving into Q3.

Data from Deribit Insight indicated an improvement in bearish sentiment following the Federal Open Market Committee (FOMC) meeting, with optimism surrounding the potential approval of the spot Ethereum ETF by early July.

Should this positive sentiment persist, Bitcoin could see a rebound from its current position at $66,000. However, BTC technical analyst CrypNuevo remains cautious, noting that Bitcoin may retest lower ranges before targeting the $73,500 level, where significant liquidity is concentrated.

Conclusion

In summary, Bitcoin’s recent underperformance compared to US tech stocks highlights the importance of understanding market dynamics and macroeconomic influences. While short-term projections remain uncertain, the evolving landscape of both traditional and digital assets will keep investors attentively monitoring their next moves.