David Duong of Coinbase (NASDAQ:COIN) Institutional suggested on Tuesday that the market has already begun to factor in the potential approval of spot-based Bitcoin exchange-traded funds (ETFs). This anticipation is expected to gradually attract mainstream cryptocurrency investment, despite ongoing uncertainty around Bitcoin's performance following a possible positive decision from the Securities and Exchange Commission (SEC).
Duong highlighted an inverse correlation between cryptocurrency prices and shifts in the US Treasury yield curve since the first quarter of 2023. Bitcoin has shown a weak linear relationship with the recent rise in the yield curve, with a 90-day correlation coefficient of 0.45. In contrast, Ethereum has displayed a strong inverse correlation, with a coefficient of 0.76.
This divergence started in mid-June when several spot Bitcoin ETF applications were submitted in the United States. Duong drew parallels with the SPDR Gold Shares ETF (NYSE:GLD), which attracted inflation-adjusted income of $1.9 billion within its first 30 days and $4.8 billion during its first year. This comparison suggests considerable fund inflows into the Bitcoin market, provided at least one application is approved.
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