Bitcoin closed the month of October with the highest performance in the last 33 months. For the tenth time in its history, Bitcoin closed a month above USD 10,000.
Kraken’s latest market report reveals that, in October, Bitcoin had its best monthly performance since April. The report highlights that the increase in the price of Bitcoin (BTC) for October was higher than 28%.
That performance puts October just behind April when the price of BTC jumped more than 34%. At that point, the recovery from the March market crash began. That event occurred along with the declaration of a coronavirus pandemic, as well as the collapse of traditional markets and that of cryptocurrencies.
Not only was October the third best-performing month since November 2019, but Bitcoin closed it at its highest price in 33 months, says Kraken. Also, it is the 10th time in its 11-year history that Bitcoin has closed a month above USD 10,000.
Towards the end of October, Bitcoin decoupled from traditional assets and had a negative correlation with them. One particularly prominent case is that of S&P 500. The report also points to a correlation of -0.34, which contrasts with 0.86 recorded in mid-October.
This year, the behavior of Bitcoin in the market has reached record highs regarding its correlation with traditional markets. These include gold, with which it exceeded 0.70 (or 70% correlation) last August. However, BTC also broke away from gold in October, with a -0.22 correlation, according to data from Kraken.
In 2020, BTC’s returns have outperformed those of all other markets. Traditional indexes, large-company stocks, and precious metals have all had lower returns than the pioneering cryptocurrency.
Key Events and fall in Bitcoin’s Volatility
In a previous report, Kraken noted that higher returns would come in October that would coincide with increased volatility. However, after exceeding 50% volatility at the beginning of the month, that percentage fell to a range between 32% and 37%, according to the most recent report.
October’s key events include new institutional investment milestones in Bitcoin, according to Kraken. For example, Square sought to safeguard part of its capital by purchasing USD 50 million worth of BTC.
The study also mentions the new high regarding investments during a quarter in investment firm Grayscale: 1 billion USD worth of Bitcoin.
Another significant milestone is PayPal’s entry into the game, announcing its Bitcoin purchase, sale, and payment service. Singapore’s DBS, one of the largest banks in Southeast Asia, followed it with the launch of a Bitcoin exchange.
Kraken believes that the growing number of large investors (whales) who continue to accumulate capital in BTC will lead to further increases in its price. They even forecast new highs and the possibility of approaching the USD 20,000 level again, which the cryptocurrency touched during the 2017 bullish rally.
The report highlights that, historically, November is one of the months with the highest volatility. On average, the second last month of the year maintains 85% volatility in the history of BTC. This could be a significant piece of information to evaluate the behavior that Bitcoin will maintain in the future.
By Alexander Salazar
