After having declined in September, Bitcoin’s returns reached 28% in October. According to Kaiko, Bitcoin purchases with US dollars were between 4 and 5 times higher than its sales in October.
After having recorded negative returns in September, Bitcoin (BTC) showed a notable 27.93% rebound last month. According to its October report, analytics firm Kaiko highlighted that announcements about institutional adoption drove this increase.
The report indicated that October was one of the best months in Bitcoin’s history since this cryptocurrency recorded one of its best returns.
It is possible to better visualize the resurgence of Bitcoin in October by analyzing the combined trading volume of Bitcoin and Ether (ETH), according to the report.
Even though the price of Ether had positive returns in October, this cryptocurrency declined in the end and did not exceed USD 400, according to Kaiko.
Investors turned to Ether, which showed the best returns in August and September. However, in October, they returned to Bitcoin amid positive sentiment for the pioneering cryptocurrency, the authors note.
Correlations with No Clear Trend
The movements of Bitcoin have been similar to those of conventional stocks in some recent periods and in line with those of gold in other periods, the report indicates. There have also been periods in which the first cryptocurrency has followed a similar trend to that of both asset classes, say the authors.
However, the Standard & Poor’s index ended the month of October with a 3% increase, while Bitcoin neared 28%. There is no clear narrative of Bitcoin’s correlations with other asset classes, Kaiko notes.
Investment management company Fidelity states that, on an extended time scale, this cryptocurrency does not show any correlation with traditional assets. This information appears in the second part of its Bitcoin Investment Thesis, in which they explore Bitcoin’s role as an alternative investment.
The Kaiko report also observes that there has been an increase in the gap between purchases and sales of the BTCUSD pair on different exchanges, especially on Bitstamp and Gemini. For example, on Bitstamp, purchases exceeded sales by a factor that ranged between 4 and 5 on average in October.
Ethereum’s Ether and DeFi Decline in October
Besides addressing and analyzing the increase in the price of Bitcoin, Kaiko’s report records a decline in the trading volume of Ether. That has happened amid a double-digit decline in the top eight decentralized finance (DeFi) tokens.
Following the notable rebound in decentralized finance in early September, the Bitcoin boom in October coincided with negative double-digit returns from the top eight DeFi tokens. The report highlights that Yearn Finance (YFI) was the worst performer, with -54%.
In early October, the increase in the volatility of Ethereum in September affected the DeFi sector the most, which was part of Kaiko’s report from that month. Concerning investments in Bitcoin, Fidelity released the first and second parts of its Bitcoin Investment Thesis.
By Alexander Salazar
