According to Decrypt: The third quarter of 2021 was quite dismal for Bitcoin as it registered an 11.1% drop over the past three months, beating only long-term treasuries, which posted a 11.9% loss during the same period. This disappointing performance occurred despite numerous favorable factors in the crypto space, including positive court rulings, macroeconomic changes, U.S. debt debates, and ongoing efforts to approve a Bitcoin spot ETF.
Bitcoin wasn't the only asset class that suffered losses in Q3. Virtually every asset class, including gold, precious metals, U.S. stock markets, and real estate witnessed significant drops.
Predominantly, commodities were one of the only four assets to record a quarterly win, garnering a 15.5% gain, followed by cash with a 1.3% uplift.
Experts have different takes on the underlying factors of Bitcoin's weak performance and future course. NYDIG's Global Head of Research, Greg Cipolaro, attributes it to continuously high inflation, mounting interest rates, recession concerns, and a trend of poor Q3 performances for Bitcoin. Yet, Cipolaro suggests this lackluster performance may prelude to a strong Q4, which historically is one of Bitcoin's best quarters.
Meanwhile, Peter St. Onge, economist at the Heritage Foundation, sees subdued inflation as a reason behind the sluggish Bitcoin performance, stating recent Middle Eastern events could potentially trigger changes.
Despite the recent shortfall, Bitcoin still showcases a 63% gain on the year, making it one of only four to post double-digit gains and surpassing its closest contender, U.S. Large Cap Growth Funds, by more than twice which makes it still an attractive investment option.