A possible bitcoin surge might begin between now and April if the cryptocurrency follows past trends after halving, according to the research.
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According to the research, digital assets have continued to beat stocks this year.
According to Canaccord, bitcoin’s hegemony could wane as there is less of a need for an inflation hedge, but for the time being it still performs similarly to other risky assets.
If previous trends following the halving continue, the trader predicted that a rally in bitcoin might start between now and April.
The digital assets sector has continued to outperform the stock market this year, with bitcoin (BTC) leading the way, according to a quarterly study that broker Canaccord released on Monday.
The world’s largest cryptocurrency, according to the broker, ended the past quarter up over 140% year over year (y/y), surpassing both the S&P 500 stock index and ether (ETH), which increased by approximately 30% and 60%, respectively.
According to past trends, bitcoin tends to rise 6–12 months after the halving and reaches new highs 2–6 months later. As a result, the broker predicted that a possible rally might begin between now and April.
According to Canaccord, the Federal Reserve’s 50 basis point (bps) interest rate drop caused a surge higher for both digital assets and stocks.
Given the reduced need for an inflation hedge and the increase in ether and other digital assets alongside riskier equities as “investors become more willing to underwrite longer-term growth and innovation,” the report concluded that “we think the most healthy reaction for crypto’s long-term future in a scenario like this would be a decline in BTC.”
According to analysts under the direction of Michael Graham, Bitcoin is currently responding favourably to the “lower-rate environment” and is performing similarly to other risk assets.
The authors noted that the correlation between Bitcoin and risky assets is currently 0.4, having peaked at 0.6 in June 2022.
Beneficial supply and demand dynamics following the April bitcoin halving might increase the positive tailwinds from exchange-traded funds (ETFs), the paper noted, even though the timing of any subsequent rate reduction is uncertain.