Coinbase revealed its research report
Coinbase, one of the largest cryptocurrency exchanges in the world, is forecasting what the crypto markets will look like in the second half of 2022.
Starting with Bitcoin, Coinbase claims in a research report that when the Mt. Gox compensation plan is implemented in the second half of this year, the supply of Bitcoin might surge.
The Mt. Gox exchange hack eight years ago resulted in the recovery of over 140,000 Bitcoin.
“From the flows side, we are also watching progress on the Mt. Gox settlement to see when Bitcoin payments totaling approximately $7 to $8 billion could potentially arrive in the market, which could be as early as second-half 2022 or delayed until 2023”, the report reads.
According to Coinbase, algorithmic stablecoin issuers purchasing Bitcoin might possibly offset the supply that the Mt. Gox compensation scheme would unleash.
In March, Terraform Labs revealed its plans to purchase $10 billion worth of Bitcoin as a backing for its UST algorithmic stablecoin. Similar ambitions by Tron Network might be beneficial for Bitcoin.
“On April 21, Tron announced that it is targeting reserves of $10 billion for the USDD algorithmic stablecoin it plans to launch on May 5, which we think could prompt similar buying in the future. As more alt L1s follow in Terra’s footsteps, this is a developing narrative that could provide a new avenue of technical support for the crypto market.”
Moreover, the transition from a proof-of-work to a proof-of-stake consensus mechanism, which is planned in the second half of 2022, is optimistic for Ethereum, according to Coinbase.
“Ethereum’s transition to proof-of-stake, which removes an important event risk for the network, reduces ETH issuance (potentially making this a deflationary asset) and likely increases ETH staking yields.”
“In the interim, we are also likely to see increasing competition among the protocols and decentralized applications (DApps) that have surfaced in the last two years and would expect to see new developments that will continue to capture market attention in this space.”
“The commoditization of Ethereum layer-2 networks which could introduce new L2 tokens and potentially a new category for crypto investments,” the US-based crypto exchange added.
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