Coinbase, a leading cryptocurrency exchange, believes that macroeconomic factors will play a significant role in shaping the market sentiment for digital assets, even after the recent Bitcoin halving. This contradicts the previous expectation of a bullish run solely driven by industry-related factors.
In a research report, analyst David Han highlighted the importance of external factors such as geopolitical tensions, interest rates, reflationary policies, and national debts in influencing crypto markets. These factors, independent of the cryptocurrency ecosystem, are expected to have a considerable impact on market sentiment. For instance, when Israel retaliated against Iran, the price of Bitcoin dropped below $60,000 as investors sold off their holdings and turned to assets like gold, silver, and bonds.
The report also noted the increased correlation of altcoins to Bitcoin, indicating Bitcoin’s role as a key anchor in the crypto space. Despite the emergence of various digital assets, Bitcoin remains a leader and solidifies its position as a macro asset.
While historical data suggests that previous halving events have often coincided with bull markets, Coinbase’s report suggests that additional catalysts within the crypto space have also contributed to these uptrends. The halving event, which occurs every four years, is expected to drive market movements in the coming days.
However, just before the halving took place, the price of Bitcoin dipped from $64,620 and continued on a downward trajectory. It bottomed out at around $63,036 and remained in the $63,000 range for over twelve hours after the halving. Currently, Bitcoin is trading at $63,945.53, showing a marginal 1% slump, indicating that the halving is not fully priced in yet.
Coinbase also highlights the changing perception of Bitcoin among investors. An increasing number of investors view it as “digital gold” and a hedge against geopolitical risks. This shift in outlook has created two distinct investor groups: those who see Bitcoin as a speculative asset and those who use it as a macroeconomic hedge.
This report aligns with the sentiments expressed by Goldman Sachs, which cautioned against drawing direct comparisons with previous market cycles and overestimating the impact of halving events.
Considering the prevailing macroeconomic conditions, including geopolitical tensions and monetary policy decisions, analysts anticipate that the cryptocurrency market will follow a different path after the halving.
