Coinbase Predicts Positive Second Quarter Outlook for Crypto Market Amid Anticipated Bitcoin Halving and Potential ETF Approvals

Coinbase, in its recent research report, has expressed optimism regarding the crypto market's outlook for the second quarter of 2024, suggesting that most of the previously identified challenges are now behind. Notably, the upcoming bitcoin halving, anticipated between April 16-20, stands out as a significant event impacting the supply side. This quadrennial occurrence involves a 50% reduction in miner rewards, thereby curbing the rate of bitcoin supply growth. Furthermore, Coinbase anticipates potential approval of spot bitcoin exchange-traded funds (ETFs) by wirehouses, such as Morgan Stanley, Bank of America, UBS, and Goldman Sachs, following the conclusion of a 90-day review period, possibly around April 10. The report underscores sustained institutional interest in cryptocurrencies, evidenced by increased leveraged short positions in Chicago Mercantile Exchange (CME) bitcoin futures, and the record high total value locked (TVL) in on-chain derivatives. Additionally, Coinbase suggests that market volatility may be influenced by investors shorting shares of MicroStrategy (MSTR), a software company that has strategically invested in bitcoin.