Bitcoin BTC/USD and the wider digital asset market are expected to experience sustained growth following the U.S. Federal Reserve's decision to cut interest rates by 50 basis points, according to Geoff Kendrick, head of forex and digital assets research at Standard Chartered.
What Happened: Kendrick pointed out that while political factors, including the upcoming U.S. presidential election, still play a role, macroeconomic trends are now the primary drivers of digital asset prices, The Block reported.
He noted that the recent Federal Open Market Committee (FOMC) meeting, which resulted in a rate cut, has significantly boosted digital assets.
“Post the FOMC meeting, digital assets are at the top of the pack in terms of performance, for the first time in a while,” he stated in an email on Thursday.
He also pointed out that this surge in performance comes even as election predictions show a close contest, with Polymarket indicating a 52/47 lead for Kamala Harris.
However, Kendrick believes that the influence of the U.S. presidential election on Bitcoin's price has diminished compared to previous cycles.
“While the U.S. election is important, macro drivers are starting to take over,” he explained. He specifically highlighted the U.S. Treasury yield curve, saying, “I watch the U.S. 2s10s curve, and a steeper U.S. yield curve is digital asset positive.”
The yield curve, which had been inverted since July 2022, has recently returned to a positive slope, indicating a shift in market sentiment that could further support digital asset prices.
Kendrick also sees the potential for increased investment in spot Bitcoin exchange-traded funds (ETFs) in the coming months, which could provide additional tailwinds for the market.
“Watch for renewed spot bitcoin exchange-traded fund inflows in October,” he added.
While the political landscape remains relevant, Kendrick emphasized that the broader macroeconomic environment, including interest rate changes and market liquidity, will have a more substantial impact on Bitcoin’s price trajectory.
He reaffirmed his earlier forecast, predicting Bitcoin could hit new all-time highs by the end of 2024, potentially reaching $125,000 if Donald Trump wins the presidency and $75,000 if Kamala Harris emerges victorious.
This forecast exceeds Deutsche Bank‘s survey, where only 12% of respondents expect Bitcoin to exceed $70,000 by year-end.
What’s Next: As the digital asset market continues to evolve, these macroeconomic shifts and their influence on cryptocurrency will be key topics of discussion at Benzinga's Future of Digital Assets event on Nov. 19, where industry leaders will explore how regulatory changes, economic factors, and political developments are shaping the future of digital finance.
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