Bitcoin as ‘digital gold’ could enable sustained demand as ETFs ease volatility: Coinbase

A hawkish view on a possible interest rate cut by the US Federal Reserve (Fed) has strengthened gold among traditional investors. This, in Coinbase’s opinion, could further increase demand for Bitcoin.

“In our view, the acceptance of Bitcoin as a form of ‘digital gold’ will drive demand from new downstream investors in this market system,” David Han, institutional research analyst at the cryptocurrency exchange, said in a report published yesterday. “It can be activated,” he said.

“As a result, even if volatility persists in the price discovery process, bear markets are likely to be bought more aggressively than in previous cycles,” he added.

Han also noted that the recent launch of a spot Bitcoin exchange-traded fund in the U.S., which could provide broader access to capital, could ease Bitcoin price volatility.

“In our view, the capital unlocked by ETFs probably represents the most fundamental change in market structure between the previous 2020-2021 cycle and now,” Han added. “This unlocking of capital is coupled with the coming cycle. Bitcoin BTC

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“The full second quarter still appears to be constructive from our perspective due to the halving (estimated to occur on April 20-21, depending on fluctuations in network hash rate) and other positive factors.”

Han and fellow Coinbase analyst David Duong said earlier this week that while the Bitcoin halving could already be priced in by seasoned traders, the collective belief in the price rise associated with the halving could still lead to such an outcome. .

According to The Block’s Bitcoin Halving Countdown, Bitcoin halving is scheduled to occur in approximately 14 days.

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