CoinDesk reported that Coinbase, in a recent research report, expressed optimism for a positive second quarter in the crypto market, noting that many previously identified challenges are now receding.

The report suggests that these positive developments may become more evident as April progresses, particularly after April 16-20, when the bitcoin reward halving is expected to occur.

This halving event, which reduces miner rewards by 50%, is anticipated to impact the supply side of the market. Additionally, Coinbase highlights the upcoming conclusion of the 90-day review period by wirehouses, such as Morgan Stanley, Bank of America, UBS, and Goldman Sachs, regarding new financial offerings like spot bitcoin exchange-traded funds (ETFs), potentially as early as April 10. While these wirehouses are significant gatekeepers of wealth, Coinbase notes that major U.S. wealth-management platforms outside of these institutions could also influence market dynamics. Moreover, Coinbase underscores the heightened institutional interest in the crypto space, citing record-high levels of leveraged short positions in Chicago Mercantile Exchange (CME) bitcoin futures.

Additionally, the report mentions the all-time high total value locked (TVL) in on-chain derivatives, signaling positive market sentiment despite DeFi TVL remaining below its previous highs. Finally, Coinbase highlights the potential impact of investors shorting shares of MicroStrategy compared to those holding long positions in bitcoin, which could contribute to recent market volatility.

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