- Standard Chartered’s recent research explores the potential impact of U.S. fiscal policies on the cryptocurrency market.
- The bank suggests that the growing risk of U.S. fiscal dominance could boost the appeal of cryptocurrencies as alternative assets.
- Standard Chartered maintains an optimistic outlook on Bitcoin’s price, reiterating its target of $150,000 by the end of the year and $200,000 by the end of 2025.
Standard Chartered’s research suggests that U.S. fiscal policies could bolster the appeal of cryptocurrencies, with Bitcoin potentially serving as a hedge against de-dollarization and waning confidence in the U.S. Treasury market.
Implications of U.S. Fiscal Dominance on Cryptocurrencies
Standard Chartered’s analysis highlights a scenario where increasing fiscal dominance might lead to a supportive environment for cryptocurrencies like Bitcoin. The bank’s report suggests that such economic conditions could make Bitcoin an attractive hedge against potential de-dollarization and a decline in confidence in the U.S. Treasury market. The Bitcoin price has a positive correlation with these potential financial developments, according to Geoff Kendrick, an analyst at Standard Chartered.
Impact of a Second Trump Administration on Cryptocurrencies
The prospect of Donald Trump winning a second term as U.S. President could also significantly influence the cryptocurrency landscape. Standard Chartered suggests that a second Trump administration might accelerate the withdrawal of foreign official buyers from the U.S. Treasury market due to fiscal concerns. This trend was evident during Trump’s first term, with the average annual net selling of U.S. government debt during Trump’s presidency ($207 billion) contrasting sharply with that during Biden’s ($55 billion).
Potential Regulatory Environment for Digital Assets
Standard Chartered anticipates that Trump’s potential reelection could lead to a more supportive regulatory environment for digital assets. This support could manifest in looser regulations and the approval of U.S. spot Exchange Traded Funds (ETFs) for other cryptocurrencies, which would likely provide a significant boost to the market. This proactive support, combined with the passive boost from de-dollarization, positions Bitcoin and other digital assets for potentially increased valuation and broader adoption.
Conclusion
Standard Chartered maintains an optimistic outlook on Bitcoin’s price amid these analyses, reiterating its target of $150,000 by the end of the year and $200,000 by the end of 2025. The bank’s research suggests that U.S. fiscal policies and potential political developments could significantly influence the cryptocurrency market, potentially bolstering the appeal of cryptocurrencies as alternative assets.
