The outlook for Bitcoin in the fourth quarter remains promising despite ongoing market turbulence caused by escalating tensions in the Middle East and U.S. employment data releases. In a recent report, analysts from K33 highlighted Bitcoin’s notable resilience. Additionally, the ongoing reimbursements for FTX clients are progressing well, potentially bringing new liquidity into the market.
Bitcoin's Recovery Amid U.S. Employment Data
Stronger-than-expected U.S. employment data contributed to a market rebound over the weekend, allowing Bitcoin to recover some of its recent losses. This rebound aligns with analysts' predictions that Bitcoin is well-positioned for robust performance by the end of the year.
A key factor driving market sentiment is the progress of FTX’s bankruptcy proceedings. Nearly two years after the exchange's collapse, U.S. Bankruptcy Judge John Dorsey approved a reorganization plan for FTX. This plan includes the reimbursement of creditors, though it has faced criticism for refunding lost cryptocurrencies in fiat currency at the time of the exchange’s collapse, when crypto prices were significantly lower than their current values.
According to K33 analysts Vetle Lunde and David Zimmerman, reimbursements are expected to begin toward the end of the fourth quarter and extend into early 2025. The process is anticipated to start within 60 days of the court's ruling, scheduled for mid-November.
Small claims under $50,000 are expected to be settled during this period, amounting to about $1.2 billion. Larger creditors could receive payments totaling up to $9 billion by February 2025.
Will Refunded Funds Reenter the Market?
A critical question for market observers is how much of the returned capital will flow back into the cryptocurrency market, particularly Bitcoin, during the fourth quarter. Lunde and Zimmerman pointed out that many crypto assets have been converted into fiat currency to reimburse creditors.
Out of the total claims, estimated between $14.4 billion and $16.3 billion, approximately $3.9 billion have been acquired by institutional funds for long-term investments. Moreover, about one-third of the remaining claims are tied to sanctioned countries, insiders, or individuals lacking Know Your Customer (KYC) verification, who will be unable to claim their funds.
Considering these factors, the analysts estimate that around $8 billion remains, with 20% to 40%—or roughly $2.4 billion—potentially reentering the cryptocurrency markets. However, they believe this inflow will be gradual and, therefore, unlikely to have a significant immediate impact on Bitcoin’s price.
Market Performance and Bitcoin’s Strength
K33’s analysis also revealed that only 21 of the top 100 cryptocurrencies outperformed Bitcoin in 2024, with most of these being low-liquidity tokens, memecoins, or new Layer 1 projects. Nearly half of the top 100 cryptocurrencies posted negative returns, while 25, including ETH, SOL, AAVE, DOGE, and TRX, registered gains but underperformed Bitcoin.
Buying Opportunities Amid Geopolitical Risks?
In an analysis shared with Cryptonews.com, the ETC Group suggested that past trends indicate sell-offs linked to geopolitical risks often present attractive buying opportunities. They added that with geopolitical tensions easing, other factors—such as the increased likelihood of Donald Trump's election—have helped support the market’s recovery.
From a macroeconomic perspective, the latest U.S. employment report exceeded expectations, alleviating concerns about an imminent recession in the United States. Despite recent turbulence, market sentiment remains neutral, with traders closely monitoring liquidity shifts and broader macroeconomic developments.
According to ETC Group, their internal “Cryptoasset Sentiment Index” has reversed from elevated levels, returning to a neutral sentiment, indicating a more cautious market stance as investors await further developments.