Coinbase suggested that the impact of the 2024 Bitcoin (BTC) halving on the market is unpredictable with the asset trading in a relatively shallow market.
The firm said in a report on Wednesday that a consolidating bullish narrative is complicated by Bitcoin’s current liquidity and the strength of the US dollar.
ETF approvals may inject needed liquidity
She said that while markets expect future scarcity to positively affect the price of bitcoin, past reductions in the asset’s emission rate do not present any clear patterns.
The recent rise in liquidity no It provides insight into an event that is only scheduled to happen in the spring of 2024.
After the halving, the rewards for miners for solving the block hashes of the transactions drop to around 3 bitcoins. Halving occurs approximately once every four years and contributes to Bitcoin’s advantage as a deflationary asset.
Inside sources revealed earlier today that asset manager BlackRock intends to apply for a Bitcoin exchange-traded fund (ETF). The company reportedly intends to use Coinbase as an institutional custodian.
If approved, new Bitcoin allocations from the potential ETF and pension fund could inject much-needed liquidity into the markets in time for the halving. The depth of the bitcoin market suffered after the collapse of market maker Alameda Research.
The US Securities and Exchange Commission is currently fighting Grayscale Investments in court after denying the asset manager’s request to convert the Grayscale Bitcoin Trust (GBTC) into an ETF.
A Grayscale victory could also partially mitigate Bitcoin’s illiquidity by allowing relevant shareholders to redeem GBTC shares.
The redemptions will also allow the trust shares to regain parity with the spot Bitcoin price.
Bitcoin will benefit from the SEC’s hard-nosed approach
The SEC previously rejected previous Bitcoin ETF applications, citing possible manipulation of the underlying market. It has approved several bitcoin futures products from ProShares and VanEck, among others.
The agency sued Coinbase earlier this month for operating as an unregistered broker in the United States. This lawsuit could be a potential mitigating factor in BlackRock’s ETF application.
Bitcoin bull Michael Saylor said Bitcoin’s crypto dominance would skyrocket and emerge the winner from the SEC’s crackdown. Speaking in a recent interview with Bloomberg, President of MicroStrategy He saidAnd
“Bitcoin dominance and the crypto economy have gone from 40 to 48% this year alone, but I think with the disappearance of stablecoins and tokens, that long-term dominance is heading towards 80%.”
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