Bitcoin ETFs: Coinbase Institutional Predicts Market Adjustment
Coinbase Institutional Anticipates Gradual Increase in Cryptocurrency Investments
According to David Duong of Coinbase Institutional, the market is already factoring in the potential approval of spot-based exchange-traded funds (ETFs) for Bitcoin. This anticipation is expected to attract mainstream cryptocurrency investment gradually. Despite ongoing uncertainty surrounding Bitcoin’s performance following a potential positive decision from the Securities and Exchange Commission (SEC), Duong believes that the market is poised for adjustment.
Inverse Correlation Between Cryptocurrency Prices and US Treasury Yield Curve
Duong highlights an interesting inverse correlation between cryptocurrency prices and shifts in the US Treasury yield curve since the first quarter of 2023. While Bitcoin has shown a weak linear relationship with the recent rise in the yield curve, with a 90-day correlation coefficient of 0.45, other cryptocurrencies have displayed a strong inverse correlation, with a coefficient of 0.76.
Comparison with SPDR Gold Shares ETF
Duong draws parallels with the SPDR Gold Shares ETF, which experienced significant fund inflows upon its launch. The ETF attracted $1.9 billion in inflation-adjusted income within its first 30 days and $4.8 billion during its first year. This comparison suggests the potential for substantial fund inflows into the Bitcoin market, provided at least one spot Bitcoin ETF application is approved.
The Future of Bitcoin Investments
The current market sentiment indicates growing interest and excitement surrounding the potential approval of spot-based Bitcoin ETFs. The anticipation of mainstream cryptocurrency investment has already influenced market dynamics. However, the future performance of Bitcoin remains uncertain, and investors should carefully consider the risks involved.
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