Bitcoin leads the market! Based on past experience, a rebound is expected from now until next April.

Brokerage firm Canaccord highlighted in a report on Monday that Bitcoin has outperformed the S&P 500 in the past year. It also suggested that a decline in Bitcoin could be healthier for the overall cryptocurrency market. The report mentioned a potential rebound for Bitcoin from now until next April.

Bitcoin Leading the Market Over the Past Year, Rebound Expected Until April Next Year

The brokerage firm Canaccord pointed out in a report that mainstream cryptocurrencies continue to outperform the market. They stated, "The largest cryptocurrency by market capitalization, Bitcoin, saw an annual increase of around 140% in the previous quarter, outperforming Ethereum with a 60% increase and the S&P 500 index with a 30% increase."

It was also noted that if Bitcoin follows its historical pattern, it typically rebounds within 6 to 12 months after halving and reaches a new all-time high within 2 to 6 months, indicating a potential rebound period until April next year. The Bitcoin halving this time occurred on April 20th, with the 6 to 12 months timeframe approaching. However, unlike before, this round had already reached historical highs before the halving.

Analyst: Bitcoin Decline Beneficial for the Overall Market

Canaccord also stated that a two-notch rate cut by the Federal Reserve would lead to a rise in stocks and cryptocurrencies together. Analyst Michael Graham mentioned that Bitcoin's current performance is still in line with other risk assets and is positively responding to the low-interest-rate environment.

Michael Graham said, "We believe that the healthiest response for cryptocurrencies in the long term is for Bitcoin to decline." He added, "With the reduced demand for inflation hedging, investors will be more willing to support long-term investments and innovation. Ethereum and other digital assets will rise along with stocks."

The report indicated that the current correlation between Bitcoin and risk assets is 0.4, lower than the historical high of 0.6 in June 2022. At the same time, the supply of stablecoins increased by 7% in the third quarter, which is a positive sign for the market. The report also mentioned that although the timing of future rate cuts is still uncertain, the dynamic adjustment of supply and demand due to the Bitcoin halving that has already occurred will further drive ETFs.

As for whether Bitcoin is considered a risk asset or a hedge asset like digital gold, it may be difficult to categorize purely based on its trend, as it remains highly correlated with the market. However, as mentioned in BlackRock's report, Bitcoin did not fall as "relatively" harshly as the S&P 500 in some events, but with some factors, BlackRock believes that Bitcoin is more than just a hedge asset.

Is Bitcoin a risk asset? BlackRock Renames Bitcoin as a "Unique Diversification Tool"