Bitcoin Carving Its Own Narrative Away From Equities, Says Coinbase Analyst — Q2 Outlook Neutral

• Coinbase’s David Duong said Bitcoin is starting to decouple from U.S. equities as BTC-stock correlation declines amid Iran-driven volatility.
• Duong is neutral on Q2 2026 but bullish in the short term due to improving liquidity and supportive macro conditions.
• Long-term BTC holders continued to accumulate in Q1, while Strategy’s STRC product reportedly bought faster than the market sold.

Coinbase Institutional's David Duong said that Bitcoin and the broader crypto market are decoupling from U.S. equities amid headline-driven volatility from the Iran conflict, which is scattering risk assets at the Milk Road Show on Saturday.

The firm said the analyst is "neutral for Q2 of 2026", although upbeat short term, citing a supportive macro environment and "conducive liquidity dynamics" underpinning rate trends.

"It feels like we're kind of jumping from day to day," the analyst said, referencing the headline whiplash from the Middle East. "But it is interesting that equities are rallying at the moment. The correlation between Bitcoin and U.S. equities, which actually peaked around 65% in February, has been coming down over the last few weeks."

Duong cited a number of favorable on-chain signals. In the first quarter, tip rates against shorts fueled narratives that old holders were selling out, but actually long-term Bitcoin holders, defined as holding for more than 155 days, increased their balances during this period. Strategy's (MSTR) STRC digital asset credit product has also been deploying capital raised into Bitcoin purchases at a rate "far outpacing" current selling.

The institutional side includes Morgan Stanley's recently launched crypto ETF that is being recommended by RIAs, and Goldman Sachs (GS) is preparing a covered-call Bitcoin. In a January survey by Coinbase, 65% of investors said they would like to increase their crypto exposure or invest for the first time.

COIN stock was down 0.1% in after-hours. On Stocktwits, retail sentiment around COIN remained in the ‘bullish’ zone, while chatter remained at ‘high’ levels over the past day. 

ETH Narrative Improves 

The analyst also pointed to ETH's increasingly bullish narrative, noting that fears that Layer 2 chains will "eat ETH's lunch" are receding, while ETH now dominates in quantum resistance and AI agent infrastructure.

In the short-term, one of the main catalysts was from this U.S. Treasury General Account (TGA), the analyst said, which has risen to nearly $1 trillion due to tax receipts. May spending should free up liquidity that is supportive for risk assets, which should be positive for crypto.

Read also: Bitcoin Flips Tesla Again: BTC Reclaims $1.62 Trillion Crown In Latest Trillion-Dollar Tug-Of-War

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