One of the largest crypto exchanges, Coinbase, predicts that Bitcoin (BTC) will enter the fourth quarter of 2024 with strong performance. This analysis is driven by a combination of two important factors: US rate cuts and monetary stimulus from the Chinese government.
Optimism for Bitcoin Growth
Coinbase analysts express their optimism, especially with BTC currently priced around $65,000. The Federal Reserve's rate cuts are expected to lead to greater capital inflow into the market. These measures also prompt other monetary authorities to take more aggressive stimulus actions. For instance, lowering bank reserve requirements is seen as beneficial for market liquidity and potentially supporting Bitcoin's positive performance.
Impact of Chinese Stimulus on Crypto Market
In addition to measures in the US, China has also implemented a series of stimuli, including interest rate cuts and a reduction in reserve requirement ratios. These steps aim to increase lending and reduce existing credit burdens. As a result, market liquidity is expected to increase, which will help support the growth of Bitcoin and other crypto assets in Q4 2024.
Challenges for Ethereum
While optimism for Bitcoin continues to rise, the Coinbase report also highlights some challenges faced by Ethereum. Despite increased on-chain activity for Ethereum, reflected in growing DEX trading volumes and rising Gas fees, the launch of an ETH spot ETF in the US has not had a significant impact. Some market participants are even skeptical about ETH's performance, given that it seems to benefit less from the ETF launch than Bitcoin.
Overall, Coinbase believes that the combination of US rate cuts, Chinese fiscal and monetary stimuli, and global economic conditions will create a supportive environment for strong Bitcoin performance in Q4 2024. Historical data also shows that October is a positive month for Bitcoin, where prices have risen in eight of the last ten Octobers. With ongoing adoption and the expected launch of Bitcoin ETFs to boost liquidity and institutional interest, Coinbase is optimistic that Q4 2024 could set new records for BTC.
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