Top US-based crypto exchange Coinbase believes digital assets are just warming up for big rallies in the months ahead.

In a new research report, Coinbase Institutional says the recent change in the macroeconomic backdrop suggests that Bitcoin (BTC) and crypto are primed for a Q4 surge.

Coinbase says the Fed and the People’s Bank of China (PBOC) are now pursuing looser monetary policies – conditions that have historically been supportive of higher crypto prices.

“Looking ahead, we retain a constructive outlook for 4Q24 mostly predicated on our favorable view of the current macro environment, alongside the idiosyncratic factors listed above.

For example, just last week, we argued that one of the most significant implications of the Fed decision to cut 50bps (basis points) is that this provides cover for other monetary authorities to take more stimulative measures.

This has been followed by China revealing a massive double fiscal and monetary stimulus package that includes a record-breaking rate cut, liquidity support for stocks, and a drop in the banking reserve requirement ratio – all in an effort to both ‘boost lending and reduce the existing loan burdens.'” 

The crypto exchange argues that while the labor market is showing signs of softening, the US economy remains resilient.

“2Q24 GDP figures have come in above expectations at 3.0% (vs a median 2.9% Bloomberg survey estimate), reaffirming our view that near-term recession risks remain low.” 

Coinbase also notes that crypto and the stock market have been moving in tandem as of late, indicating that Bitcoin and the rest of the digital asset market will follow the S&P 500’s march to new record highs.

“The correlation between crypto and stock markets has been high lately, close to 50%, driven by global easing campaigns in the US and China… Overall, key metrics indicate a robust market. Funding rates are stable and open interest is near average six-month levels. Taken together, it suggests the market is well positioned to head into what is typically a good month for crypto with BTC up eight of the last 10 Octobers.”

At time of writing, Bitcoin is trading for $65,846.