According to Coinbase, the second quarter of 2024 will be bullish for Bitcoin as major institutions get in via ETFs
US-based crypto exchange Coinbase says the second quarter of 2024 will likely be a bullish period for Bitcoin (BTC) and the broader digital assets market.
In a new LinkedIn post, David Duong, head of institutional research at Coinbase, said says that the previously identified headwinds for crypto are now in the rearview mirror.
“Looking forward, the 2Q24 setup appears to be more conducive to crypto performance in our view. However, we assume that these positive factors will only become more apparent from the second half of April onwards.”
Duong says that in addition to the upcoming halving, which will halve BTC miners' rewards, another catalyst that could drive BTC prices higher is the entry of major institutions.
According to the Coinbase manager, institutions typically evaluate new financial products like that Recognize Bitcoin exchange-traded funds (ETFs) for three months before offering them to your clients.
“[On] On the demand side, the 90-day review period that many wirehouses use when due diligence on new financial offerings – like spot Bitcoin ETFs – could end as early as April 10. That means it's common for large broker-dealers to conduct rigorous 360-degree assessments before allowing wealth advisors to allocate client assets.
Their assessments examine in depth (1) whether such products meet minimum investment and liquidity thresholds and (2) whether the required daily trading, custody and regulatory reporting activities pose insurmountable operational challenges to their existing infrastructure.”
According to Duong, financial giants Morgan Stanley (MS), Bank of America (BofA), UBS Group AG and Goldman Sachs (GS) may start offering Bitcoin ETFs to their customers after the 90-day review period. He also says wirehouses based outside the United States could follow suit.
“However, wirehouses like MS, BofA, UBS and GS are not the only gatekeepers of wealth here. Some large wealth management platforms operating in the US exist outside of these large financial conglomerates.
While three months is the typical (and stated) observation period for asset managers like LPL Financial, some also have shorter and longer time frames. We believe this could still unlock significant capital for US-based spot Bitcoin ETFs in the medium term.”
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