The hawkish stance regarding potential U.S. Federal Reserve interest rate cuts has strengthened gold among traditional investors. This development, in Coinbase's perspective, might drive increased demand for bitcoin.

According to David Han, an institutional research analyst at the crypto exchange, the growing acceptance of bitcoin as a digital equivalent to gold could attract interest from a new segment of investors in the current market conditions. Han emphasized that in this scenario, downturns in bitcoin's price are likely to be met with aggressive buying compared to previous market cycles, despite ongoing volatility during price discovery.

Additionally, Han highlighted that the recent introduction of spot bitcoin exchange-traded funds (ETFs) in the United States could help alleviate bitcoin price volatility by providing broader access to capital. He regarded the unlocking of capital through these ETFs as a significant shift in market structure compared to the previous cycle of 2020-2021. Han also mentioned positive catalysts such as the upcoming Bitcoin halving, anticipated around April 20-21 (subject to variations in network hash rate), which further contribute to Coinbase's optimistic outlook for the second quarter.

Earlier this week, both Han and fellow Coinbase analyst David Duong suggested that savvy traders may have already factored in the effects of the Bitcoin halving. However, they acknowledged that collective belief in a price rally associated with the halving could still influence market dynamics.

According to The Block's Bitcoin Halving Countdown, the Bitcoin halving is approximately 14 days away.