-AD-
-AD-
HomeNewsCoinbase Predicts Record-Breaking Quarter for Bitcoin—Here’s Why

Coinbase Predicts Record-Breaking Quarter for Bitcoin—Here’s Why

- Advertisement -
  • Interest rate cuts by the U.S. Federal Reserve have prompted other monetary authorities to adopt similar policies.
  • U.S. GDP growth exceeded expectations at 3.0%, reducing concerns about an imminent recession risk.

Coinbase has expressed an optimistic outlook for Bitcoin as we head into the fourth quarter of 2024, underpinned by increased liquidity resulting from recent policy measures in the United States and China. As Bitcoin hovers around the $65,000 mark, analysts from the cryptocurrency exchange see robust demand setting the stage for a potentially strong end to the year.

In a recent market report, Coinbase analysts highlighted last week’s interest rate cuts by the U.S. Federal Reserve. They suggest that this reduction in rates not only boosts available capital but also enables other monetary authorities to implement more aggressive stimulus measures. 

“The decrease in the bank reserve requirement in particular should be beneficial for market liquidity,” Coinbase’s report states. To put this into perspective, it indicates that this measure is positively correlated with BTC performance.

This chain reaction was evidenced by subsequent fiscal and monetary stimulus in China, including interest rate cuts and a reduction in the reserve requirement ratio, aimed at boosting lending and alleviating existing credit burdens.

Trading volumes on Coinbase platform (USD)

However, Coinbase cautions that the impact of increased liquidity on Bitcoin and the broader cryptocurrency market may not be immediate or sustained. The exchange anticipates a possible delay in these measures positively affecting market performance, despite observing signs of economic strength.

“We anticipate a constructive fourth quarter in 2024 due to US rate cuts and significant fiscal and monetary stimulus from China, which should improve market liquidity and support BTC performance,” the exchange team says.

Coinbase also addressed concerns about a potential recession. The U.S. economy continues to exhibit resilience, with second-quarter GDP growth rates exceeding expectations at 3.0% compared to the forecasted 2.9%. This performance supports Coinbase’s view that short-term recession risks remain low. 

Trading volumes on Coinbase platform by asset

Nonetheless, upcoming East Coast port strikes could pose challenges for the economy in the fourth quarter, although their impact on inflation is expected to be minimal due to the relatively small share of maritime transport in overall goods costs.

Regarding the cryptocurrency market conditions, Coinbase remains confident. Recent U.S. and Chinese monetary easing has had a positive effect on both stocks and cryptocurrencies, as observed in market data. 

Financing Rates – Coinbase Report

Futures markets show stable financing rates and open interest levels close to six-month averages. This data supports the view that the market is well-positioned for October, historically a strong month for Bitcoin, which has seen price increases in eight of the last ten Octobers.

Adding to the positive outlook, the recent U.S. approval of Bitcoin ETFs is seen as a favorable development. Coinbase believes that these financial instruments could enhance institutional adoption and liquidity, thus bolstering the cryptocurrency market’s prospects for the upcoming quarter.

Disclaimer: ETHNews does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to cryptocurrencies. ETHNews is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.
Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: [email protected] Phone: +49 160 92211628
RELATED ARTICLES

LATEST ARTICLES