The US-based giant cryptocurrency exchange Coinbase has published a research report predicting a positive second quarter for the crypto market. According to Coinbase, these positive factors will become more evident from the second half of April, potentially leading to an upward trend in the market.
Positive Second Quarter Expected for Crypto Market
One of the positive factors highlighted in the report is the anticipated fourth block reward halving for Bitcoin (BTC) supply side event, expected to occur between April 16-20. Occurring approximately every four years, the block reward halving reduces the block reward given to miners for each block they mine by 50 percent, effectively slowing the rate of supply growth and influencing market dynamics.
On the demand side, Coinbase points out that brokerage firms, including major financial institutions like Morgan Stanley, Bank of America, UBS, and Goldman Sachs, usually wait for a 90-day review period when considering new financial offerings such as spot Bitcoin exchange-traded funds (ETFs). The review period for spot Bitcoin ETFs is expected to end around April 10. According to the report, this could potentially unlock a significant flow of capital into US-based spot Bitcoin ETFs.
Despite the dominance of brokerage firms, Coinbase also emphasized that some major US asset management platforms could operate in the crypto market independently of these large financial institutions. For instance, platforms like LPL Financial typically observe a three-month review period, which could potentially pave the way for increased capital inflows into crypto-related assets in the medium term.
The report also indicates that the overall market volatility could be influenced by investors purchasing shares of software developer MicroStrategy (MSTR), which strategically allocates significant resources to buy BTC. According to Coinbase, this shift could be one of the most apparent outcomes of the approval and trading of spot Bitcoin ETFs in the US.
High Institutional Interest
Furthermore, the Coinbase report notes that the record level reached by leveraged short positions in Bitcoin futures at the Chicago Mercantile Exchange (CME) on March 19 indicates strong and high institutional interest in the crypto market currently.
Moreover, the report emphasizes that despite the total value locked (TVL) in decentralized finance (DeFi) remaining below the high levels of the previous cycle, it has been steadily increasing. According to data providers, the TVL of on-chain derivatives has risen to an all-time high of 3.4 billion dollars.
