Bitcoin dips are likely to be bought up aggressively as investors view BTC as digital gold, says Coinbase Institutional
The research department of leading US crypto exchange platform Coinbase says investors are likely to aggressively buy Bitcoin (BTC) in the future if the price falls.
In a new blog post, Coinbase Institutional says gold is a winner this cycle due to increasing economic and geopolitical concerns.
According to Coinbase, gold's success is due to both the threat of inflation and the expectation that the Federal Reserve will begin its interest rate cutting cycle.
“In this environment, gold was the biggest winner, hitting new highs amid increased central bank purchases, heightened geopolitical risks and reflation concerns.
What's notable about gold's performance is that its appreciation is generally associated with both Fed rate cuts and higher inflation.
Given the market's recent hawkish views on rate cuts, we believe gold's performance signals an overweight to inflation relative to Fed rate changes, as well as a general belief that certain bouts of inflation could be more problematic than expected.”
Looking at Bitcoin, Coinbase Institutional says the market can expect more aggressive accumulation of BTC during correction phases, as the leading crypto asset by market cap is widely accepted as “digital gold.”
“In our view, the increasing adoption of Bitcoin as a form of 'digital gold' could drive demand from a new subset of investors in this market system. “As a result, we expect there will likely be more aggressive buying during dips compared to previous cycles, even if volatility persists during price discovery.”
Coinbase also says it remains bullish on the crypto king as it benefits from spot market BTC exchange-traded funds (ETFs) demand as the network prepares for the halving's reduction in new BTC supply.
“In our view, the capital released by the ETFs represents perhaps the most fundamental change in market structure between the previous 2020-21 cycle and today
These capital releases coupled with the upcoming Bitcoin halving (expected to take place April 20-21, subject to network hash rate fluctuations) and other positive catalystsIn our opinion, we are still largely constructively confident throughout the second quarter.”
At the time of writing, Bitcoin is trading for $69,283.
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