Coinbase "Virtual asset market in Q4 depends on liquidity, policy, and stablecoin proliferation"

The main factors that could drive the virtual asset (cryptocurrency) market in the fourth quarter this year were cited as the liquidity environment, policy progress, stablecoins (virtual assets pegged to fiat currencies), and the expansion of exchange-traded fund (ETF) infrastructure.

On the 20th (Korean time), according to crypto-focused media CoinDesk, citing a report from global crypto exchange Coinbase Institutional, "short-term risks exist but it is likely that a positive trend will be maintained through the end of the year," and analyzed that "liquidity conditions, policy progress, and the expansion of stablecoin and ETF infrastructure will act as market upside factors."

Specifically, the report pointed to excessive leverage and thin liquidity as the main causes of the recent Bitcoin (BTC) price correction, saying that automatic liquidations at some exchanges further tightened liquidity by constraining market makers' short positions, but it assessed that "prices have since stabilized and the market has entered a gradual recovery phase."

The analysis was positive regarding liquidity. The report said, "the global M2 money supply index has shown a similar pattern to Bitcoin with about a 110-day lag, and currently a gradual expansion of liquidity is having a positive effect on the market." However, the possibility of liquidity tightening in November, delays in U.S. government statistics, and uncertainty related to digital asset financial companies (DAT) were identified as short-term risk factors.

The report also explained that "stablecoin issuance and trading volumes remain at record highs, and the maturation of spot ETF infrastructure for Bitcoin and Ethereum (ETH) is expanding participation from traditional finance," calling it "a basis that sustains trading and liquidity despite market volatility."