The recent 2024 Market Outlook report from Coinbase has been followed by a fresh analysis from its institutional arm. This analysis focuses on the significant market happenings related to two leading cryptocurrencies, bitcoin and ethereum. Titled "Q1 2024 Guide to Crypto Markets," this report highlights key events that are set to influence the future direction of these digital currencies.
Coinbase Institutional Study Delves Into Bitcoin's Halving, Ethereum Cancun Upgrade
Coinbase Institutional, in partnership with Glassnode, has published a new report that provides a comprehensive analysis of the metrics and trends tied to today's two leading cryptocurrencies. This study sheds light on the intricate workings of the crypto market and offers valuable insights into its critical aspects.
The report emphasizes that the Bitcoin network is approaching a pivotal moment with its next halving expected in the second quarter of 2024. This event, which has historically had a profound impact on BTC's market dynamics, is once again set to be a focal point for investors. The report suggests that the next Bitcoin halving in 2Q24 could have a positive impact on the token's performance. However, it also cautions that the limited historical data makes the outcomes somewhat speculative.
On the other hand, Ethereum is gearing up for the Cancun upgrade, anticipated in the first quarter of 2024. This upgrade, following the successful Shapella upgrade, is expected to further enhance Ethereum's scalability and security. The report highlights the introduction of Proto-Danksharding, a technology that aims to make layer two (L2) transactions more cost-effective and significantly increase transaction throughput on the Ethereum network.
The Coinbase study also sheds light on the increasing institutional interest in crypto assets. It underscores a trend towards more mature market behavior, evidenced by decreasing volatility and a growing preference for sophisticated investment strategies. The report suggests that institutional players are looking beyond mere speculation to more strategic, long-term positions, marking a new era in crypto investment.
Coinbase's Q1 2024 guide notes the substantial growth of the derivatives market for both BTC and ETH. Increasing volumes and open interest indicate a deepening market and a diversification of strategies among investors. Market participants use bitcoin derivatives for various reasons, including gaining capital-efficient access to BTC, hedging spot exposure, mitigating mining risks, and hedging other tokens that don't have liquid and regulated derivatives.
Coinbase Global (Nasdaq: COIN) could witness a highly lucrative 2024 if it assumes the role of custodian for several prominent spot bitcoin exchange-traded funds (ETFs), subject to regulatory approval. Additionally, the firm's stock has seen a remarkable 78% increase in the past six months, with COIN shares climbing an impressive 331% over the previous year. The latest projections suggest that 2024 might significantly outshine the cryptocurrency downturn of 2022, barring any unforeseen extraordinary developments.
What do you think about Coinbase's latest report on 2024? Share your thoughts and opinions about this subject in the comments section below.
Frequently Asked Questions
Which precious metal is best to invest in?
This question is dependent on the amount of risk you are willing and able to accept as well as the type of return you desire. Although gold has been considered a safe investment, it is not always the most lucrative. For example, if your goal is to make quick money, gold may not suit you. You should invest in silver if you have the patience and time.
Gold is the best investment if you aren't looking to get rich quick. However, silver might be a better option if you're looking for an investment that provides steady returns over long periods.
Is buying gold a good option for retirement planning?
Although gold investment may not seem appealing at first glance due to the high average global gold consumption, it's worth considering.
The most popular form of investing in gold is through physical bullion bars. But there are many other options for investing in gold. It is best to research all options and make informed decisions based on your goals.
If you don’t have the funds to invest in safe places, such as a safe deposit box or mining equipment companies, buying shares of these companies might be a better investment. Owning gold stocks should work well if you need cash flow from your investment.
ETFs allow you to invest in exchange-traded funds. These funds give you exposure, but not actual gold, by investing in gold-related securities. These ETFs can include stocks of precious metals refiners and gold miners.
What is the benefit of a gold IRA?
Many benefits come with a gold IRA. It's an investment vehicle that lets you diversify your portfolio. You control how much money goes into each account and when it's withdrawn.
You also have the option to transfer funds from other retirement plans into a IRA. This is a great way to make a smooth transition if you want to retire earlier.
The best part? You don’t need to have any special skills to invest into gold IRAs. They are offered by most banks and brokerage companies. You do not need to worry about fees and penalties when you withdraw money.
There are, however, some drawbacks. Gold is historically volatile. It's important to understand the reasons you're considering investing in gold. Are you looking for safety or growth? Is it for security or long-term planning? Only after you have this information will you make an informed decision.
If you are planning to keep your Gold IRA indefinitely you will want to purchase more than one ounce. A single ounce isn't enough to cover all of your needs. Depending on the purpose of your gold, you might need more than one ounce.
If you're planning to sell off your gold, you don't necessarily need a large amount. You can even live with just one ounce. You won't be capable of buying anything else with these funds.
Is gold a good IRA investment?
Gold is an excellent investment for any person who wants to save money. It can be used to diversify your portfolio. There is much more to gold than meets your eye.
It has been used throughout the history of currency and remains a popular payment method. It's sometimes called “the world's oldest money”.
But unlike paper currencies, which governments create, gold is mined out of the earth. This makes it highly valuable as it is hard and rare to produce.
The price of gold fluctuates based on supply and demand. If the economy is strong, people will spend more money which means less people can mine gold. The result is that gold's value increases.
On the flipside, people may save cash rather than spend it when the economy slows. This results in more gold being produced, which drives down its value.
It is this reason that gold investing makes sense for businesses and individuals. If you invest in gold, you'll benefit whenever the economy grows.
You'll also earn interest on your investments, which helps you grow your wealth. You won't lose your money if gold prices drop.
What precious metals do you have that you can invest in for your retirement?
It is gold and silver that are the best precious metal investment. They are both simple to purchase and sell, and they have been around for a long time. You should add them to your portfolio if you are looking to diversify.
Gold: This is the oldest form of currency that man has ever known. It is also extremely safe and stable. Because of this, it is considered a great way of preserving wealth during times when there are uncertainties.
Silver: Investors have always loved silver. It's an ideal choice for those who prefer to avoid volatility. Unlike gold, silver tends to go up instead of down.
Platinium: Another form of precious metal is platinum, which is becoming more popular. Like gold and silver, it's very durable and resistant to corrosion. It is however more expensive than its counterparts.
Rhodium: The catalytic converters use Rhodium. It is also used as a jewelry material. It is also very affordable in comparison to other types.
Palladium: Palladium is similar to platinum, but it's less rare. It's also more affordable. Investors looking to add precious and rare metals to their portfolios love it for these reasons.
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)