- Coinbase said the crypto market will be driven by macro factors in the short term.
- Previous halvings have been accompanied by catalysts from other crypto ecosystems that acted as tailwinds.
- Volatility has decreased this cycle as more investors use Bitcoin as a macro hedge, the report said.
Coinbase (COIN) said in a research report on Thursday that the direction of the digital asset market after the Bitcoin (BTC) halving will be driven by macroeconomic factors, even though the cryptocurrency's fundamentals remain strong. He said it was highly likely.
“These factors are primarily exogenous to cryptocurrencies and include the growth of cryptocurrencies. geopolitical tensions“Rising due to longer interest rates, reflation, and rising national debt,” analyst David Hung wrote.
The recent rise in the correlation between altcoins and Bitcoin highlights this and points to BTC's anchor role in this space, even as it consolidates its position as a macro asset. ” Han wrote.
While past halvings have historically triggered bull markets, “these cyclical rallies are often accompanied by other ecosystem catalysts that provide additional tailwinds,” the report said. .
Reward once every 4 years cut in half Bitcoin supply growth rate slows by 50%, expected to occur Late tonight or early tomorrow (UTC)
While cryptocurrencies have largely been viewed as a “risk-on” asset class, Coinbase believes that “Bitcoin’s continued resilience and approval The rise of spot exchange-traded funds (ETFs) has created a polarized group of investors (especially for Bitcoin). One sees Bitcoin as a purely speculative asset, and the other sees Bitcoin as “digital gold” to hedge geopolitical risks. ”
The report added that an increase in investors using Bitcoin as a macro hedge partially explains the smaller pullback size this cycle.
Wall Street giant Goldman Sachs (GS) expressed a similar view in a report last week. “Given the current macro situation, caution should be taken in extrapolating the effects of past cycles and half-lives.”
read more: Goldman warns against extrapolating past Bitcoin halving cycles to predict prices
