Bitcoin (BTC-USD) briefly soared back above $52,000 Wednesday, which Citizens JMP Senior Research Analyst Devin Ryan attributes to favorable "supply and demand dynamics." Joining Yahoo Finance Live, Ryan says demand still has room to grow given the spot bitcoin ETF adoption being in its "very early stages."

As ETF exposure expands, Ryan expects further demand boosts for bitcoin. He believes bitcoin ETF offerings are "the right wrapper for certain types of investors." As exposure grows, he believes it will benefit platforms like Coinbase (COIN).

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith

Video Transcript

- And Devin, I want to start you off on this price action. You would think riskier assets, especially after that hot inflation print, they turn lower. Why is Bitcoin so resilient right now?

DEVIN RYAN: Well, I think it's just simplistically supply demand dynamics. And the ETF we're still in the very early days, so I actually think demand could grow pretty materially or even exponentially from here. But there's been a lot of demand with the ETF coming in in recent weeks. And so I think we're in the first inning of that demand though. If you think about the sponsors of the ETF, and you think about the tens of trillions of dollars of assets.

The next wave is going to come when financial advisors actually allocate to the asset class in a broader asset allocation plan, and that hasn't even really started yet. So I think this is early, people getting in early adopters, small RIAs that are putting their clients' capital into Bitcoin. But I actually think that as that expands out, you're going to see even more demand. So that's really, there's a multiplier effect on capital. So as small amounts of capital come in, it pushes the valuation higher. And I think, again, we're in the early days of that.

- These new, these new spot Bitcoin ETFs, what do they mean for Coinbase? So we've had, I asked because we've had other analysts come on and say listen, it might be bad news for Armstrong and his team, because to the extent that so many some traders and investors might think what I want exposure to Bitcoin, I'll sidestep Coinbase, I'll pile into these new shiny vehicles.

DEVIN RYAN: Yeah. So I'd take the other side of that and I'll actually give you one stats of Robinhood reported earnings last night. They said they offer all 11 of the spot Bitcoin ETFs. They said that 95% of the volume that's happening in crypto is still happening in spot, not on the ETFs there. Because people want to own the spot. So what's happening with these ETFs is this incremental capital. You've essentially removed a barrier for certain subset of investors to get access.

These are financial advisors that are not going to move their customers capital outside of the firm, outside of their own custodian. Now they can custody within the same platform. And so this is more capital from them coming in, and certain institutions want to own it in an ETF structure. And so it's the right wrapper for certain types of investors. People that are comfortable buying it in a spot form, which is really what the world has been up until January of this year, those investors are going to continue to buy spot.

And by the way, if you buy spot Bitcoin and then you buy Bitcoin ETF, I think that ultimately what happens is people then start looking at what other cryptocurrencies are out there, what is Ethereum, what are some of the other crypto, cryptocurrencies that are not in an ETF wrapper. And so that's where for a company like Coinbase, just more interest in the space, more adoption, drives more activity.

And I think that's what we're seeing. You're seeing huge volume, the volumes at Bitcoin are up, oh excuse me, at Coinbase are up over 30% in the first quarter relative to where they were in the fourth quarter of last year.