Hawkish sentiments regarding potential U.S. Federal Reserve interest rate cuts have strengthened gold among traditional investors, a trend that Coinbase believes could spur increased demand for bitcoin.
David Han, an institutional research analyst at the crypto exchange, highlighted in a report released recently that bitcoin’s growing recognition as a form of “digital gold” may attract interest from a new subset of investors in the current market environment.
“In our view, dips are likely to be more aggressively bought compared to previous cycles, even amidst ongoing price discovery volatility,” Han stated.
Moreover, Han emphasized that the recent introduction of spot bitcoin exchange-traded funds (ETFs) in the United States, along with the broader access to capital they offer, could help alleviate bitcoin price volatility.
Han noted, “In our view, the capital unlocked by the ETFs perhaps represents the most fundamental shift in market structure between the previous 2020-2021 cycle and today.” He added that these capital unlocks, combined with the imminent Bitcoin halving (projected to take place on April 20-21, subject to variations in network hash rate) and other positive catalysts, maintain a largely constructive outlook throughout Q2.
Han, along with fellow Coinbase analyst David Duong, suggested earlier this week that savvy traders might have already factored in the impact of the Bitcoin halving, although a collective belief in a halving-related price rally could still influence market dynamics.
The Bitcoin halving is slated to occur in approximately 14 days.
