The report from Standard Chartered suggests that a Trump election victory could have positive implications for the cryptocurrency market. Here are the key points outlined in the report:
- Supportive Regulatory Environment: A second Trump administration is expected to push for a more supportive regulatory environment for cryptocurrencies. This could include looser regulation and the approval of U.S. spot ETFs, which would likely benefit the crypto market.
- Hedge Against De-dollarization: In a scenario of U.S. fiscal dominance and declining confidence in the U.S. Treasury market, Bitcoin (BTC) could serve as a hedge against de-dollarization. Investors may turn to cryptocurrencies as alternative assets amid concerns about government debt monetization.
- Impact on Treasury Curve: U.S. fiscal dominance could lead to specific changes in the U.S. Treasury curve, including a steeper nominal 2-year/10-year curve, greater increases in breakevens than real yields, and an increase in term premium. Bitcoin’s price has a positive correlation with these potential developments.
- Withdrawal of Foreign Buyers: A second Trump administration could accelerate the withdrawal of foreign official U.S. Treasury buyers due to fiscal concerns. During Trump’s first term, there was an average annual net selling of U.S. government debt, whereas under Biden’s presidency, the net selling was lower.
- Price Targets: Standard Chartered reiterated its bitcoin price targets, forecasting $150,000 by the end of the year and $200,000 by the end of 2025. These projections reflect the bank’s bullish outlook on the cryptocurrency market under a potential Trump administration.
