The analysts at Coinbase, one of the leading cryptocurrency exchanges, are predicting a significantly positive performance for Bitcoin and the entire crypto market in Q2 2024. This forecast comes as Bitcoin continues to show signs of market recovery, with a 3.31% increase in the last week, bringing its price above $43,000.
According to the weekly report released by Coinbase, the factors that previously exerted downward pressure on Bitcoin are now gradually fading away. This claim is supported by the completion of the GBTC’s liquidations by defunct exchange FTX, as well as the recovery of certain crypto entities from bankruptcy. These developments indicate a shift in the dynamics of the BTC market, which is expected to have a positive impact on its performance.
In addition to the above factors, the Coinbase analysts also highlighted the stable performance of the Bitcoin spot ETF market in the past week. The market witnessed an average daily net inflow of $200 million, along with a daily trading volume of $1.35 billion. Such stability in the ETF market is indicative of the growing confidence and interest of investors in Bitcoin.
However, the Coinbase market experts have predicted that in the coming weeks, macroeconomic factors will play a more significant role in shaping the crypto market. They specifically referenced the US Federal Reserve’s decision to postpone the deliberation on scaling back its quantitative tightening (QT) to the next Federal Open Market Committee (FOMC) meeting in March. This delay implies that the easing cycle is likely to begin on May 1, with measures such as lowering interest rates to stimulate economic activity.
The Coinbase analysts believe that the Federal Reserve may implement the end of balance sheet reduction alongside rate cuts. They predict that the US apex bank will cut interest rates by 100 basis points (bps), which is 25 bps more than the Fed’s expectation for future rates. Such a reduction in interest rates is considered positive for the digital asset ecosystem as it allows investors to borrow at lower fees, resulting in more funds being available to invest in risk assets like crypto tokens.
Considering the various factors mentioned above, along with the “idiosyncratic” factors such as the Bitcoin halving, the analysts at Coinbase predict that BTC, as well as other tokens, will be favorable additions to investment portfolios in Q2 2024.
At the time of writing, Bitcoin is trading at $43,077.76, reflecting a 0.20% gain in the last 24 hours. The daily trading volume has experienced a slight decrease of 15.45%, currently valued at $16.78 billion. With a market cap of $844.85 billion, BTC continues to dominate as the largest cryptocurrency in the world.
The cryptocurrency market is poised for a positive performance in Q2 2024, according to analysts at Coinbase. With the elimination of the previous downward pressures, the stable performance of the Bitcoin spot ETF market, and the anticipated macroeconomic policies of the Federal Reserve, investors are expected to view cryptocurrencies favorably as portfolio additions. However, it is crucial for investors to conduct their own research and be aware of the risks associated with cryptocurrency investments.