Bitcoin Demand May Surge Alongside Gold as ETFs Reduce Volatility – Coinbase Analyst

• A Coinbase analyst believes Bitcoin’s status as “digital gold” could drive continuous demand.
• ETFs are seen as a potential volatility reducer, attracting investment amid a hawkish interest rate climate.
• “We think dips are likely to be more aggressively bought compared to previous cycles,” states the Coinbase report.

A Coinbase analyst predicts Bitcoin could benefit from its “digital gold” narrative and reduced volatility due to ETFs. This may lead to increased demand and aggressive buying during market dips.

Bitcoin: The “Digital Gold” Narrative

Coinbase Institutional Research Analyst David Han believes Bitcoin’s growing acceptance as “digital gold” could attract a new wave of investors, particularly in the current interest rate environment. This narrative, coupled with the potential for ETFs to mitigate volatility, could fuel Bitcoin’s demand.

ETFs as a Volatility Buffer

Han highlights the recent launch of spot Bitcoin exchange-traded funds (ETFs) in the U.S. as a significant factor impacting market structure. ETFs broaden access to capital, potentially reducing Bitcoin’s characteristic volatility. This, combined with the upcoming Bitcoin halving, creates a bullish outlook for Q2, according to the analyst.

The Bitcoin Halving Factor

While Han acknowledges savvy traders might have already priced in the Bitcoin halving event (scheduled in roughly 14 days), the collective market belief in a halving-related price rally could still drive positive price action.

Conclusion

Coinbase’s analysis suggests that Bitcoin’s strengthening position as “digital gold” and the potential for ETFs to smooth out market volatility create a favorable environment for the cryptocurrency. Investors may see dips as buying opportunities, leading to increased demand in the near future.