The cryptocurrency has fallen 11.1% in the past three months, beating only long-dated Treasuries.

Bitcoin (BTC) bottomed in the third quarter of the year, with investors losing 11.1%, narrowly beating long-term Treasury bonds’ net value of -11.9% during the same period. (Public account; Pepe Stud)

Greg Cipolaro, global head of research at Bitcoin firm NYDIG, writes about the cryptocurrency’s poor performance and how it challenges recent events in the cryptocurrency space.

Cipolaro pointed to favorable court cases, macroeconomic changes, the recent “quagmire” in government funding, the debate over U.S. debt, and “ongoing efforts to secure approval of a spot Bitcoin ETF,” stressing that these developments are all Failure to push Bitcoin past the upper end of its current range - which he said is $31,000.

However, Bitcoin wasn’t the only asset to post losses last quarter. In fact, nearly every asset class — including gold and other precious metals, U.S. stocks, and real estate — suffered significant declines.

Notably, only four assets posted wins during the quarter, with commodities up 15.5%, followed by cash, up 1.3%.

Peter St. Onge, an economist at the Heritage Foundation, said Bitcoin’s underperformance could be due to a brief pause in its price gains. “I think the main driver in the near term is that inflation looks more subdued,” he told Decrypt, adding that gold is also feeling the effects.

However, this trend may not last long. St. Onge noted that recent events in Israel could spark price action in financial assets. “We have to see what happens in the Middle East,” he said, explaining that “hard assets tend to go up, but risk assets go down.”

To him, “Bitcoin is both.”

St. Onge’s view differs from that of NYDIG’s global head of research.

Cipollaro believes that “persistent” high inflation, rising interest rates, “recession concerns” and seasonal factors will all affect returns, and emphasized that Bitcoin tends to underperform in the third quarter of each year. However, perhaps in an effort to give investors hope, he wrote that there is a silver lining to “underperformance”: the fourth quarter was one of the best quarters in the asset’s history.

Despite its recent positive quarter, bitcoin investors will have to wait and see if the top cryptocurrency resumes the early 2023 trend that has sent the asset on fire. Bitcoin is up 63% this year, one of four funds to post double-digit gains and more than double its closest competitor, the U.S. Large Cap Growth Fund.