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Bitcoin could attract new subset of investors as 'digital gold,' says Coinbase analyst

Coinbase analyst acknowledges that the upcoming halving event could act as a catalyst for price increases.

Bitcoin could attract new subset of investors as digital gold

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Gold surges to new highs as inflation fears escalate and central banks ramp up buying. In contrast, crypto slumps after the Federal Reserve shows a cautious approach to rate cuts. Coinbase analyst David Han sees this environment as an opportunity for Bitcoin, suggesting its growing acceptance as ‘digital gold’ could attract a new “subset of investors.”

“Dips are likely to be more aggressively bought compared to previous cycles, even as volatility persists during price discovery,” Han stated in a report published on Friday.

Additionally, Han noted that easier access through US spot Bitcoin exchange-traded funds (ETFs) could bring in more institutional capital, potentially reducing volatility.

Han added two positive signs for Bitcoin: increased institutional involvement and the upcoming Bitcoin halving. CME Bitcoin futures open interest, at $9.9 billion, now surpasses that of any single centralized exchange and represents a significant portion of the total Bitcoin futures market. This shift, along with the anticipated Bitcoin halving around April 20-21, is viewed positively for Q2.

“In our view, the capital unlocked by the ETFs perhaps represents the most fundamental shift in market structure between the previous 2020-21 cycle and today. These capital unlocks, coupled with the upcoming Bitcoin halving (estimated to occur on April 20-21 subject to variations in network hash rate) and other positive catalysts, make us still largely constructive in our view throughout Q2,” Han wrote.

Han and David Duong, Head of Research at Coinbase, said in a recent report that the crypto market may get a boost in Q2 due to the influence of spot Bitcoin ETFs and the halving event.

According to Han, the upcoming halving event could trigger price increases. Still, the analyst suggested that the crypto market’s typical seasonal slowdown might temper this potential upswing.

“The BTC halving, currently due April 20 or 21, could be a catalyst for higher prices, but it will have to contend with what is typically a weak time of year for crypto markets and other risk assets,” Han stated.

Bitcoin is being taken seriously by key financial players. Earlier this week, four Wall Street titans, including Goldman Sachs, UBS, Citi, and Citadel Securities, were added as authorized participants for BlackRock’s Bitcoin ETF, iShares Bitcoin Trust.

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