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Coinbase research report details next steps for Bitcoin and EthereumHighlights new class of crypto investments

US-based digital asset exchange Coinbase analyzes what lies ahead for the crypto markets in the second half of 2022.
Starting with Bitcoin (BTC) Coinbase says in a research note that supply of the flagship crypto asset could skyrocket when the Mt. Gox compensation plan update kicks off in the second half of this year.

Over 140,000 bitcoins were recovered by the Mt. Gox exchange hack eight years ago.

“On the river side, we are also monitoring progress on the Mt. Gox agreement to see when Bitcoin payments totaling about $7 billion to $8 billion could potentially hit the market, which is already in the second half 2022 or delayed until 2023. ”

According to Coinbase, Bitcoin purchases could be powered by algorithmic stablecoin-Issuers may offset the supply that the Mt. Gox compensation plan would unlock.

Terra (LUNA) developer Terraform Labs announced in March a goal to acquire $10 billion worth of Bitcoin as a backstop for its UST algorithmic stablecoin. Coinbase predicts similar plans for Layer-1 (L1) smart contract-enabled Blockchain Tron (TRX) could be bullish on bitcoin.

“On April 21, Tron announced that it is targeting $10 billion in reserves for the USDD algorithmic stablecoin, which it plans to launch on May 5, which we think could lead to similar purchases in the future. As more alt-L1s follow in Terra’s footsteps, this is an evolving narrative that could offer a new avenue of technical support for the crypto market.”

Turn to Ethereum (ETH) Coinbase says migrating from proof-of-work to proof-of-stakeconsensus mechanismwhich is expected in the second half of 2022, for the second largest crypto asset behind market capitalization is optimistic.

“Ethereum’s move from to Proof-of-Stake that will remove a key event risk for the network, reduce ETH issuance (potentially making it a deflationary asset) and likely increase returns on ETH stakes.

The US-based crypto exchange also says that the continued growth and innovation in the cryptocurrency industry will keep participants interested.

“Meanwhile, we are also likely to see increased competition between the protocols and decentralized applications (DApps) that have emerged over the past two years, and we would expect new developments to continue to capture market attention in this space will.”

Coinbase also says that Ethereum scaling solutions, also known as Layer 2 (L2) networks, could spawn new categories of crypto investments.

“The commercialization of Ethereum Layer 2 networks that could introduce new L2 tokens and potentially a new crypto investment category.”
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Source: Crypto News Deutsch

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