Coinbase Report: The Price Discovery of Cryptocurrency Remains Rooted in Global Demand Trends
ChainCatcher news, according to CoinDesk, Coinbase stated in a research report released on Friday that both U.S. stocks and gold have been declining since peaking in mid-April, against the backdrop of a strengthening dollar. The largest cryptocurrency by market capitalization fell 16% in April, marking the largest monthly decline since June 2022."What makes us optimistic in this pullback is that BTC's maximum drawdown from its peak is 23%, which is below its historical range," analysts David Han and David Duong wrote."We believe that this overall trend of reduced drawdowns will continue, partly due to BTC's legitimization as a macro asset," the authors wrote. This is supported by spot trading funds (ETFs) in the U.S., Canada, and Europe, as well as the recently launched ETF in Hong Kong and new applications in Australia."Although the inflows from overseas ETFs may not be as large as those seen in the U.S., we believe they represent an important signal of global regulators' involvement in this asset class," the report stated."The average daily spot trading volume of CEX in the first quarter of 2024 was $18.8 billion, more than eight times higher than the daily trading volume of $2.3 billion for U.S. spot trading funds (ETFs) during the same period," the report noted. "This difference in activity leads us to believe that Bitcoin's price discovery remains rooted in global demand trends."