Coinbase Analysts Optimistic About Cryptocurrency Market

Coinbase analysts maintain a positive outlook for the cryptocurrency market as the end of 2024 nears, citing favorable macroeconomic conditions.

> "Overall, we would still expect a supportive macro environment for crypto performance over the next 1-2 quarters, driven by stimulative U.S. monetary policy and stronger U.S. economic conditions," said Coinbase Head of Institutional Research David Duong and Analyst David Han.

In addition to these economic factors, they noted that the election of Donald Trump as the 47th president of the United States—set to be inaugurated on Jan. 20, 2025—could positively impact the crypto market. The analysts mentioned that the expected deficit spending from the incoming Trump administration should lead to greater risk-taking as more dollars circulate in the economy.

Crypto-supportive candidates were elected across the political spectrum after the U.S. election results.

> "This has set up strong expectations about a friendlier regulatory environment in the U.S. next year," they added. The U.S. House gained 263 pro-crypto candidates versus 118 anti-crypto candidates, while the Senate gained 18 pro-crypto candidates versus 12 anti-crypto candidates.

Solana's Memecoin Activity Boosts Network Fees

The Coinbase analysts highlighted increases in Solana's network activity over the past year, particularly in memecoin trading.

> "Solana's status as a memecoin hub means its on-chain trading protocols are the third most profitable crypto sector after stablecoins and layer-1 network fees," they stated.

Memecoins have been the best-performing crypto sector this year, as shown by total market cap growth, primarily on Solana due to rising adoption of pump.fun as a leading memecoin launcher.

> "More than three million memecoins have been launched on pump.fun to date, making it a major contributor to Solana’s network fees," the analysts noted.

The dominance of trading-related activity on Solana significantly impacts the network’s transaction fees, accounting for over 82% of all non-vote fees.

At the time of reporting, Solana was up 7% and trading at $201. Bitcoin also saw an increase of around 1%, trading at $75,800 after reaching a new all-time high of over $76,600 on Thursday.