Coinbase, a leading cryptocurrency exchange, believes that macroeconomic factors will play a significant role in shaping the market sentiment of digital asset markets, even after the Bitcoin halving. This is in contrast to previous post-halving events where a bullish run was expected due to industry-based factors.
According to analyst David Han, external factors such as geopolitical tensions, interest rates, reflationary policies, and national debts will have a considerable impact on the cryptocurrency market. Han emphasizes that these factors are independent of the cryptocurrency ecosystem but will still influence market sentiment. This was evident when the price of Bitcoin dropped below $60,000 following retaliatory strikes by Israel on Iran, causing investors to sell Bitcoin and favor other assets like gold, silver, and bonds.
The report also highlights the correlation of altcoins to Bitcoin, indicating that Bitcoin plays a significant role as an anchor in the crypto space. Despite the emergence of various digital assets, Bitcoin remains a leader in the market.
Although historical data suggests that previous halving events have coincided with bull markets, the report suggests that additional catalysts within the crypto space have contributed to these uptrends. The halving event, which occurs every four years, is expected to impact market movements in the coming days.
Before the halving occurred, the price of Bitcoin dipped from $64,620 and continued on a downward trajectory. It remained around $63,000 for over twelve hours after the halving. Currently, Bitcoin is trading at $63,945.53, showing that the full impact of the halving is not yet priced in.
Coinbase also highlights the changing perception of Bitcoin among investors. It is increasingly seen as a “digital gold” and a hedge against geopolitical risks. This shift in perception creates two distinct investor groups: those who see Bitcoin as a speculative asset and those who use it as a hedge against macroeconomic risks.
The report aligns with a previous report from Goldman Sachs, which cautions against making direct comparisons with previous market cycles and overestimating the impact of halving events.
Analysts predict that given the prevailing macroeconomic conditions, including geopolitical tensions and monetary policy decisions, the cryptocurrency market will follow a different path after the halving.