
Bitcoin is under much less bearish pressure since FTX’s significant holdings in GBTC were liquidated in bankruptcy. In addition, the FED’s more accommodating monetary policy from next May could give crypto a boost in the second quarter of 2024.
Liquidation of FTX holdings in GBTC, one less source of bearish pressure
Coinbase analysts say bitcoin is under less selling pressure. And this, since the mass of GBTC securities held by FTX was liquidated by the receivers in charge of the bankruptcy. As a reminder, GBTC is a financial product backed by bitcoin. As a result, it allows you to obtain exposure to the price of the cryptocurrency without directly holding it.
However, FTX owned a substantial quantity of these GBTC securities, estimated at nearly 150,000 bitcoin according to some sources. The forced liquidation of these massive assets by receivers has exerted significant downward pressure on the price of bitcoin in recent months.
Now that this GBTC stock appears to have been completely sold, the induced downward pressure has greatly eased. In addition, the imminent end of quantitative tightening (reduction of the FED’s balance sheet) should also contribute to reducing downward pressure by gradually reducing the liquidity withdrawn from the markets by the American central bank.
Towards a more accommodating Fed, potential support for bitcoin
In addition to the end of the massive sales of GBTC, Coinbase analysts are also banking on the more accommodating shift in monetary policy from the FED to support cryptocurrency prices.
They believe that the Federal Reserve should begin to relax its restrictive monetary policy from May 1, 2024. Concretely, this means the end of interest rate increases and quantitative tightening carried out since 2022 to fight inflation. The FED could even begin to lower its key rates and relaunch liquidity injections into the markets.
According to Coinbase, this change in monetary policy towards more easing could significantly benefit bitcoin and other cryptocurrencies in the second quarter of 2024. By injecting liquidity again, the FED would provide a positive tailwind for crypto prices. -active, after long difficult months.
Thanks to the end of GBTC sales and a more accommodative FED, the outlook is brightening for bitcoin and altcoins. The downward pressure is clearly easing, and the upcoming monetary easing could give a boost to the crypto market in the 2nd quarter of 2024. After a long crisis, more buoyant winds finally seem to be on the horizon.
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