Q2 2024 Will Be Bullish for Bitcoin Amid Entry of Large Institutions via ETFs, According to Coinbase

US-based crypto exchange Coinbase says Q2 of 2024 will likely be a bullish period for Bitcoin (BTC) and the broader digital asset market. 

In a new LinkedIn post, Coinbase head of institutional research David Duong says that the previously identified headwinds for crypto are now in the rearview mirror.

“Looking ahead, the setup for 2Q24 appears more conducive for crypto performance, in our view. That said, we think those positive factors may only manifest themselves more clearly starting in the second half of April.”

Duong says that aside from the upcoming halving event that will slash BTC miners’ rewards in half, another catalyst that could send the prices of BTC higher is the entry of large institutions. 

According to the Coinbase executive, institutions typically evaluate new financial products such as the spot Bitcoin exchange-traded funds (ETFs) for three months before offering them to clients.  

“[On] the demand side, the 90-day review period that many wirehouses employ when conducting due diligence on new financial offerings – like spot Bitcoin ETFs – could conclude as early as April 10th. That is, it’s customary for large broker-dealers to undertake rigorous 360-degree evaluations before permitting wealth advisors to allocate client assets.

Their assessments thoroughly examine (1) whether such products satisfy investment minimums and liquidity thresholds as well as (2) whether the requisite daily trading, custodial and regulatory reporting activities impose any insurmountable operational challenges to their existing infrastructure.”

Duong says financial titans Morgan Stanley (MS), Bank of America (BofA), UBS Group AG and Goldman Sachs (GS) may start offering Bitcoin ETFs to clients after the 90-day review period. He also says that wirehouses based outside the United States may follow suit. 

“That said, wirehouses like MS, BofA, UBS and GS are not the only gatekeepers of wealth here. Some major wealth management platforms operating in the US exist outside of these large financial conglomerates.

While three months is the typical (and stated) observation period for money managers like LPL Financial, some have shorter and longer windows as well. We think this could yet unlock significant capital for US-based spot bitcoin ETFs over the medium term.” 

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