Coinbase, a leading cryptocurrency exchange in the United States, anticipates that digital assets are just beginning to see significant rallies in the upcoming months.
In a recent research report, Coinbase Institutional indicates that the changes in the macroeconomic environment imply that Bitcoin (BTC) and the broader crypto market are set for a surge in Q4.
According to Coinbase asserts that the Federal Reserve and the People’s Bank of China (PBOC) are adopting more accommodative monetary policies, which historically foster higher crypto valuations.
“Looking forward, we maintain a positive outlook for Q4 2024, mainly based on our optimistic perspective regarding the current macro conditions and the unique factors previously mentioned.”
“For instance, last week we noted that one of the most crucial consequences of the Fed’s decision to reduce rates by 50 basis points is that it enables other central banks to pursue more expansionary policies.”
“This impetus was followed by China unveiling a substantial fiscal and monetary stimulus initiative that features a historic rate cut, liquidity assistance for equity markets, and a reduction in the reserve requirement ratio for banks, all aimed at ‘encouraging lending and alleviating existing loan pressures.’”
Coinbase contends that despite the labor market showing signs of cooling, the US economy remains strong.
“The 2Q24 GDP figures surpassed forecasts at 3.0% (compared to a median estimate of 2.9% from a Bloomberg survey), reinforcing our belief that short-term recession risks are minimal.”
Coinbase further observes that the cryptocurrency and equity markets have been moving in close correlation recently, suggesting Bitcoin and other digital assets may follow the S&P 500’s lead toward new all-time highs.
“The correlation between the cryptocurrency and stock markets has been notably high, approaching 50%, influenced by global easing policies in the US and China. Overall, key indicators display a robust market. Funding rates remain steady, and open interest is around average six-month levels. Collectively, this suggests the market is well-equipped as it enters what is generally a favorable month for cryptocurrencies, with BTC having increased in eight of the last ten Octobers.”
As of now, Bitcoin is trading at $65,846.
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Disclaimer: The opinions expressed in The Daily Hodl are not investment advice. Investors should conduct their own research before making any high-risk investments in Bitcoin, cryptocurrency, or digital assets. Please remember that your transactions and trades are at your own risk, and any losses incurred are your sole responsibility. The Daily Hodl does not endorse the buying or selling of any cryptocurrencies or digital assets, nor does it serve as an investment advisor. Please be aware that The Daily Hodl engages in affiliate marketing.
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