The Q2 Guide to Crypto Markets

The 'Guide to Crypto markets' is a quarterly series produced by Glassnode and Coinbase Institutional. It is designed to provide a detailed analysis of the key developments in crypto markets, encompassing a wide array of information such as price performance, on-chain analytics, industry events and derivatives data.

By synthesizing these elements into an easily digestible guide, we aim to provide institutional traders with the insights needed to navigate the complexities of the digital asset markets more effectively.

This publication, now in its second instalment, represents a continued collaboration between Coinbase Institutional and Glassnode, and provides readers with insights and actionable information on:

• Bitcoin Spot ETFs: Learn how Bitcoin ETFs have become and continue to be an important driver of price action for digital assets.
• The Bitcoin Halving: Discover how the halving will influence Bitcoin’s supply, demand, and price dynamics in the short to medium term.
• Capital Flows in DeFi: See how Ethereum’s Dencun upgrade impacts staking and learn about the current trends in capital flows into the DeFi space.
• Portfolio Allocation: Simulate how your portfolio’s performance could change with different levels of allocation to digital assets.
• Derivatives: Learn how Futures Volume, Open Interest and liquidations are developing in 2024.

To read the full report, download it here .

Up next, we explore some of the most compelling highlights from the Guide.

Cyclical Patterns Poised to Continue

The digital asset market is driven by a remarkable cyclicality, helping both trend and long-only investors manage their entry or exit points. The previous two bull markets lasted 3.5 years; we're currently 1.5 years into the current one. The past cycles witnessed price increases of 113x and 19x, respectively, whereas so far this cycle, prices have only just quadrupled.

Slide 22 of the Guide to Crypto Markets

Rising Popularity, Rising Maturity

The crypto pie is at its largest and most accessible thanks to the introduction of institutional-grade investment products like spot Bitcoin ETFs. Last quarter, the ETF inflows introduced $12 billion in new capital. With estimated holdings of $60 billion in BTC, the ETFs have become one of the most important drivers of the Bitcoin market. They have also become the fastest-growing launches in ETF history - and so far, there aren’t many reasons to suspect this trend will slow down in the near future.

Slide 14 of the Guide to Crypto Markets

Impacting Portfolio Performance by Adding Crypto

Between April 2019 and March 2024, incorporating a small allocation of crypto into a traditional 60/40 portfolio significantly enhanced risk-adjusted returns, with a 3% crypto allocation yielding 52.9% returns and a 5% allocation boosting returns to 67.0%, compared to 33.3% returns from the traditional strategy alone.

Slide 7 of the Guide to Crypto Markets