Top US-based crypto exchange Coinbase projects significant growth in Bitcoin and altcoin rallies for Q4, leveraging a positive macro-economic outlook.
In a recent research report, Coinbase Institutional suggests that favorable changes in the macroeconomic environment indicate a promising future for Bitcoin (BTC) and other cryptocurrencies.
Key Monetary Policies Provide Tailwind for Crypto
Coinbase highlights that both the Fed and the People’s Bank of China (PBOC) are adopting more relaxed monetary policies. Historically, such conditions have been known to support elevated crypto prices.
“Looking ahead, we maintain a positive Q4 outlook, largely based on our favorable view of the current macro environment and other unique factors.
For instance, the Fed’s recent decision to cut interest rates by 50bps allows other monetary authorities to implement more stimulative measures. This move was closely followed by China’s extensive fiscal and monetary stimulus package, featuring a record-breaking rate cut, liquidity support for stocks, and a drop in the banking reserve requirement ratio to enhance lending and reduce existing loan burdens.”
The Resiliency of the US Economy
While the labor market has shown signs of softening, Coinbase argues that the US economy remains robust.
“The 2Q24 GDP figures exceeded expectations at 3.0% compared to a median 2.9% Bloomberg survey estimate, reaffirming our belief that near-term recession risks are currently low,” Coinbase noted.
The stock market and crypto market have recently been moving in tandem. This synchronization suggests Bitcoin and other digital assets are likely to follow the S&P 500’s momentum toward new record highs.
Crypto and Stock Market Correlation
“There has been a high correlation between crypto and stock markets lately, approximately 50%, driven by global easing policies in the US and China. Significant indicators show a strong market. Funding rates remain stable, and open interest is close to its six-month average levels. These factors collectively suggest a favorable market trajectory, particularly as BTC has increased in eight of the last 10 Octobers.”
As of now, Bitcoin is trading at $65,846.
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Disclaimer: Opinions expressed at The Daily Hodl do not constitute investment advice. Investors should perform their own due diligence before investing in Bitcoin, cryptocurrency, or digital assets. Please be aware that your investments are at your own risk, and any losses incurred are your responsibility. The Daily Hodl does not endorse the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Note that The Daily Hodl participates in affiliate marketing.
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