Standard Chartered’s latest analyst note suggests that Bitcoin‘s BTC/USD recent price action reaffirms its role as a hedge against traditional financial system issues rather than geopolitical tensions.
What Happened: The bank’s analysts point out that Bitcoin’s price weakness amid Middle East tensions demonstrates it is “not a safe haven against geopolitical concerns.”
This observation aligns with their previous analysis from May, following the April Israel-Iran situation. Instead, they argue that Bitcoin serves as “a hedge against TradFi issues such as bank collapses, such as SVB in March 2023, or de-dollarization/U.S. Treasury sustainability issues.”
The note highlights a “circularity” in Bitcoin’s relationship with current events.
Also Read: Would Bitcoin Drop If A War In The Middle East Breaks Out? Yes, But There’s A Catch
While geopolitical concerns may push Bitcoin prices lower due to risk-off sentiment, these same events appear to be improving Donald Trump’s odds in the U.S. presidential race.
According to Polymarket data cited in the report, Donald Trump’s odds have increased by roughly 1% this week, creating what Standard Chartered calls “an interesting circularity for BTC.”
The analysts suggest this dynamic could ultimately benefit Bitcoin, as Trump’s improved election prospects are seen as positive for the cryptocurrency’s post-election outlook.
Supporting this view, they point to a significant increase in Bitcoin options activity, noting that “the amount of open interest for the Dec. 27 expiry at $80,000 on Deribit jumped by 1,300 BTC over the last 2 days.”
While Standard Chartered expects geopolitical concerns to potentially push Bitcoin below $60,000 before the weekend, they advize that “the dip should be bought into” based on the observed options activity and the potential upside linked to shifting U.S. election probabilities.
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
Read Next:
Image: Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
