(Bloomberg) -- Bitcoin registered a bit of a victory this quarter, even if the scale may not seem much for an asset class where outsized gains were until recently the order of the day. 

The biggest cryptocurrency rose 3.7%, recently trading about $19,392, compared to declines of about 7% for MSCI’s all-country stock index and Bloomberg’s total-return global bond index. It’s a further sign crypto prices may have stabilized following dramatic declines at the start of the year. By contrast, stocks are currently around 2022 lows. 

“It appears Wall Street believes crypto is close to the bottom and will become an attractive diversification strategy once the peak in Treasury yields is in place,” said Edward Moya, senior market analyst at Oanda Corp. “Despite all the doom and gloom on Wall Street, calls for another crypto crash have been somewhat quiet.” 

The gain might not be much, but it stands out in a sea of red, especially after an almost 60% drop in the second quarter. Asset classes across the board have been hit by a combination of rapid Federal Reserve interest rate hikes, stubbornly high inflation and heightened geopolitical tensions. The only major exception is the US dollar, with the Bloomberg Dollar Spot Index up about 6% since June 30.

Furthermore, Ethereum’s much-watched upgrade went smoothly, helping remove uncertainty, put a floor under prices and attract interest from institutional traders, said Darius Sit, co-founder of Singapore-based crypto investment fund QCP Capital. Ether rose 32% in the quarter, after an almost 70% drop in the three months ended June 30.

“The Ethereum merge was a strong Q3 2022 narrative,” Sit said. “Although we saw a post-merge dip in prices, the success of this watershed event bodes well for the space.”

Bitcoin is now also heading toward a historically more favorable time of the year. In the fourth quarter, it’s recorded gains two-thirds of the time with a median advance of 33%, pricing data back to 2010 shows. 

“While prices are depressed, the crypto ecosystem is actually thriving,” said Cici Lu, chief executive officer of Venn Link Partners Pte. “Developers are focusing on building the technologies.”

©2022 Bloomberg L.P.