- A Standard Chartered report suggests Bitcoin could perform well if Trump wins the US election due to clearer regulations and as a hedge against inflation.
- Bitcoin’s adoption by traditional investors is increasing due to unfavorable economic conditions and uncertainty in the Treasury market.
According to a recent research report by Standard Chartered, cryptocurrency markets are eyeing a potential surge as fears of U.S. fiscal dominance loom large. The investment bank suggests that the Federal Reserve monetizing government debt could drive investors towards alternative assets, such as cryptocurrencies, as they seek to hedge against uncertainties in traditional markets.
The report predicts that Donald Trump if re-elected, could spark enthusiasm in the Bitcoin market. Analysts foresee large price spikes and substantial boosts in cryptocurrency use amid such scenarios. This optimism comes from foreseeing a tighter regulatory framework, giving investors a better understanding and confidence.
Trump’s stance regarding Bitcoin has raised deep concerns among cryptocurrency enthusiasts. During his administration, Trump consistently stressed his skepticism towards Bitcoin and other cryptocurrencies, focused on the issues of their credibility, volatility, and possibility of being used for illegal purposes. In a tweet from July 2019, Trump explicitly stated his disapproval, asserting that he was “not a fan of Bitcoin and other Cryptocurrencies.” He emphasized the dominance and stability of the U.S. Dollar, suggesting a preference for traditional financial instruments over decentralized digital currencies.
Positive Signals for Bitcoin Adoption
Traditional investors have increasingly shown interest in Bitcoin, viewing it as a hedge against inflation amidst unfavorable macroeconomic conditions. The soaring US debt and the questioning of the US Treasury further fuel this trend. A second Trump presidency also benefits the industry by reintroducing regulatory clarity in the crypto sector after years of regulatory insecurity and observation.
According to Standard Chartered’s research, another four years for Former President Trump would be a positive factor for the crypto market’s growth. This report also points out the prospect of a better business climate under the Trump administration, which indicates an increase in digital asset adoption and investments.
Positive Correlation with Fiscal Development
Analyst Geoff Kendrick points out three potential effects of U.S. fiscal dominance on the Treasury curve: a steeper yield curve, rising breakeven rates, and increasing term premiums. Interestingly, Kendrick notes that the price of Bitcoin (BTC) positively correlates with these developments, suggesting that the cryptocurrency could serve as a hedge against de-dollarization and declining confidence in the U.S. Treasury market.
Last year, bullish projections on Bitcoin’s growth were witnessed, primarily driven by institutional clients. The anticipation of spot Bitcoin ETF approval and the price rally to $44,000 in December fueled optimism. Standard Chartered reiterates its bullish outlook on Bitcoin, setting a year-end target of $150,000 and projecting a further rise to $200,000 by the end of 2025.
The bank anticipates passive and active drivers for cryptocurrency growth, citing de-dollarization trends and potential regulatory support under a second Trump administration. Trump’s public statements regarding Bitcoin briefly influenced market prices in 2019, demonstrating the potential impact of political figures on cryptocurrency markets. As of the time of writing, Bitcoin is trading at $62,218 with a 24-hour decline of 2%.
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