Standard Chartered’s recent investor note, shared with CryptoSlate on Oct. 3, suggests that Bitcoin’s dip below the $60,000 mark is no cause for alarm. Instead, the global bank views the downturn as a potential buying opportunity, driven by a unique blend of geopolitical tensions and shifting U.S. election odds.
Bitcoin’s “Interesting Circularity”
According to Geoffrey Kendrick, Standard Chartered’s global head of digital assets research, Bitcoin is trading within a cyclical pattern influenced by global events. While geopolitical tensions have pushed the price downward, Kendrick noted that the growing odds of Donald Trump winning the 2024 U.S. presidential election offer long-term bullish potential for Bitcoin.
Kendrick remarked, “Bitcoin has yet to fully establish itself as a hedge against political instability like gold,” but he emphasized that its role as a hedge against systemic financial risks remains strong. This means that while BTC may not thrive in geopolitical crises, it remains a crucial asset in scenarios involving banking collapses or instability within the U.S. Treasury.
Kendrick observed that Bitcoin has struggled to function as a safe haven during periods of global uncertainty. Unlike traditional assets such as gold, Bitcoin’s performance continues to mirror that of equities in times of heightened political risk. This trend has been particularly evident in the ongoing geopolitical issues in the Middle East.
However, Kendrick believes that Bitcoin’s real strength lies in its capacity to act as a hedge against systemic financial risks. For instance, Bitcoin responded well during the collapse of Silicon Valley Bank in March 2023, demonstrating its value as a safeguard against failures in the traditional banking sector. Kendrick added that Bitcoin also benefits from broader concerns about the sustainability of U.S. Treasuries and the gradual de-dollarization of the global economy.
Election Dynamics Favor Bitcoin
In an interesting twist, Kendrick highlighted how U.S. presidential election dynamics are impacting Bitcoin. Recent data from Polymarket shows that Donald Trump’s odds of winning the 2024 election have risen by 1%, while Kamala Harris’s chances have decreased by the same margin, bringing the race to a near deadlock.
Kendrick believes that Trump’s favorable stance on cryptocurrencies could provide a boost to Bitcoin’s post-election prospects, especially if a Republican win translates into more pro-crypto policies in the U.S.
Surge in Bitcoin Options
Further emphasizing Bitcoin’s volatile relationship with market sentiment, Kendrick pointed to a surge in options trading activity on Deribit. Notably, open interest for options with a strike price of $80,000—set to expire on December 27—rose by 1,300 BTC in just two days. This increase suggests that investors are positioning for a potential rebound in Bitcoin prices by the end of the year.
Also Read: Bitcoin Fails as Geopolitical Safe Haven – 1,300 BTC Bet On $80K Price By Year-End
Despite the recent dip, Kendrick sees the current price level as an entry point for those betting on a medium-term recovery. He believes that the ongoing geopolitical tensions and U.S. election uncertainty will continue to drive Bitcoin’s volatility, offering both risks and opportunities for investors.
Opportunity Amid Uncertainty
While Bitcoin’s recent slip below $60,000 has sparked concern, Standard Chartered views the downturn as a “normal” phase in its cyclical behavior. Kendrick’s analysis highlights the complex interplay of geopolitical fears, systemic financial risks, and shifting election dynamics as key drivers of Bitcoin’s future price movements. For investors with an eye on the medium term, this could be a strategic buying opportunity.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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