Coinbase, the leading US-based cryptocurrency exchange, believes that digital assets are gearing up for big rallies in the coming months.
In a new research report, Coinbase Institutional says the recent change in the macroeconomic backdrop suggests that Bitcoin (BTC) and crypto are poised for a strong rally in the fourth quarter.
Coinbase says the Fed and the People’s Bank of China (PBOC) are now pursuing looser monetary policies – conditions that have historically supported rising cryptocurrency prices.
“Looking forward, we maintain a constructive outlook for 4Q24, based primarily on our favorable view of the current macroeconomic environment, as well as the idiosyncratic factors listed above.
For example, last week we argued that one of the most significant implications of the Fed’s decision to cut 50 basis points (bps) is that it provides cover for other monetary authorities to they can take more stimulating measures.
This was followed by China unveiling a massive dual fiscal and monetary stimulus package that includes a record rate cut, liquidity support for stocks and a cut in the bank reserve requirement ratio – all with the aim of both to “stimulate lending and reduce reserve requirements”. existing loan charges.
The crypto exchange claims that even though the job market is showing signs of slowing, the US economy remains resilient.
“2Q24 GDP figures beat expectations, at 3.0% (versus the Bloomberg survey’s median estimate of 2.9%), reaffirming our view that near-term recession risks remain low.”
Coinbase also notes that crypto and the stock market have been moving in tandem lately, indicating that Bitcoin and the rest of the digital asset market will follow the S&P 500’s march to new record highs.
“The correlation between cryptocurrencies and stock markets has been high lately, close to 50%, due to global easing campaigns in the United States and China… Overall, key indicators indicate a robust market. Funding rates are stable and open interest is near six-month average levels. Overall, this suggests the market is well-positioned to head into what is typically a good month for crypto with BTC up eight of the last 10 Octobers.
At the time of writing, Bitcoin is trading at $65,846.
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Disclaimer: Opinions expressed on The Daily Hodl do not constitute investment advice. Investors should conduct due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and transactions are at your own risk and any losses you may incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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