A recent research report from Standard Chartered suggests that Bitcoin may experience a positive performance if Donald Trump wins the US election. The report attributes this potential success to clearer regulations and Bitcoin’s ability to hedge against inflation.
Traditional investors are increasingly turning to Bitcoin as a result of unfavorable economic conditions and uncertainty in the Treasury market. Standard Chartered’s research indicates that cryptocurrency markets are anticipating a surge due to concerns over US fiscal dominance. The report suggests that if the Federal Reserve continues to monetize government debt, investors may seek alternative assets like cryptocurrencies to protect themselves against uncertainties in traditional markets.
The report also predicts that a re-election of Donald Trump could generate enthusiasm in the Bitcoin market. Analysts foresee significant price increases and a boost in cryptocurrency usage under such circumstances. This optimism stems from the expectation of a more stringent regulatory framework, which would provide investors with a better understanding and confidence in Bitcoin.
However, Trump’s previous stance on Bitcoin has raised concerns among cryptocurrency enthusiasts. Throughout his administration, Trump expressed skepticism towards Bitcoin and other cryptocurrencies, focusing on issues related to their credibility, volatility, and potential for illegal use. In a tweet from July 2019, Trump explicitly stated his disapproval of Bitcoin and emphasized the dominance and stability of the US Dollar.
Despite this, traditional investors are increasingly viewing Bitcoin as a hedge against inflation and macroeconomic uncertainties. The growing US debt and questions surrounding the US Treasury further contribute to this trend. Another term under a Trump presidency is seen as beneficial for the cryptocurrency industry, as it would potentially bring regulatory clarity after years of uncertainty and observation.
Standard Chartered’s research also highlights the positive correlation between Bitcoin and fiscal developments in the US. Analyst Geoff Kendrick identifies three potential effects of US fiscal dominance on the Treasury curve, all of which positively correlate with the price of Bitcoin. This suggests that Bitcoin could serve as a hedge against de-dollarization and declining confidence in the US Treasury market.
Last year, Bitcoin’s growth was primarily driven by institutional clients, who anticipated the approval of a spot Bitcoin ETF and the price rally to $44,000 in December. Standard Chartered maintains a 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 both passive and active drivers for cryptocurrency growth, including de-dollarization trends and potential regulatory support under a second Trump administration. It is worth noting that Trump’s public statements regarding Bitcoin have briefly influenced market prices in the past, highlighting 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%.