Standard Chartered argues that an electoral victory by Trump could have a positive impact on digital assets and Bitcoin, as well as the fiscal dominance of the United States (USA) and the increasing monetization of public debt.
Investors may therefore turn to alternative assets such as cryptocurrencies to mitigate the risks associated with the above.
The bank also confirms its price forecasts for Bitcoin, setting them at $150,000 by the end of the year and $200,000 by the end of 2025. Let’s see all the details below.
Summary
US Tax Domain: an advantage for Bitcoin, could Trump favor crypto?
As anticipated, the risk of an increasing fiscal dominance by the United States, accompanied by the monetization of public debt by the Federal Reserve, is rising.
This situation could favor cryptocurrencies, as investors seek alternatives, said Standard Chartered in a research report on Tuesday. Additionally, Donald Trump could be an advantage for cryptocurrencies.
Specifically, in the report the analyst Geoff Kendrick states the following:
“We believe that a second term for Trump would be largely positive, thanks to a more favorable regulatory environment. In a context of US fiscal dominance, we think that Bitcoin (BTC) represents a good hedge against de-dollarization and loss of confidence in US Treasuries.”
The US tax domain could have three main effects on the Treasury curve. A steeper 2-year/10-year curve, a greater increase in breakevens compared to real yields, and an increase in term premium.
According to Kendrick, the price of Bitcoin is positively correlated with all three of these potential developments.
If Trump were to win the election, his second term could accelerate the withdrawal of foreign official investors from the US Treasury market. This is due to fears related to taxation.
During his first term, the average annual net sale of US public debt was $207 billion, compared to $55 billion during President Biden’s presidency.
“In addition to the passive push to BTC due to de-dollarization, we would expect a second term of Trump to actively support BTC (and digital assets in general) through more flexible regulation and approval of US spot ETFs.”
Finally, Standard Chartered has reiterated its forecasts for Bitcoin price, setting them at $150,000 by the end of this year and $200,000 by the end of 2025.
Michael Saylor: Bitcoin is the only ‘steel’ among cryptocurrency metals
In an interview with journalist Natalie Brunell, Michael Saylor, CEO and co-founder of MicroStrategy, outlined his vision on the future price of Bitcoin.
According to Saylor, January 2024 marked the beginning of the adoption of Bitcoin by companies. A change linked to the regulatory framework and the distinctive path that Bitcoin is tracing compared to other digital assets.
The main catalyst for the future of Bitcoin, says Saylor, will be the approval by the Securities and Exchange Commission (SEC) of spot Bitcoin ETFs.
This regulatory recognition would legitimize Bitcoin in the eyes of institutional investors and increase its attractiveness as a corporate treasury asset.
Saylor also emphasized that the real turning point will be when the SEC rejects all other requests for spot cryptocurrency ETFs other than Bitcoin.
This would position Bitcoin as the only safe and distinctive choice among cryptocurrencies, dispelling doubts about its long-term uniqueness. Its metaphor on how Bitcoin compares to other cryptocurrencies is clear:
“Once one realizes that there is only steel and not a second-rate metal for structural civil engineering, the project moves forward.”
Bitcoin, in this vision, is the steel, the fundamental and irreplaceable material.
This narrative takes on particular importance in light of the SEC’s upcoming decision on the Ethereum spot ETF, scheduled for May 23, 2024.
The senior ETF analyst at Bloomberg, Eric Balchunas, has reported a decrease in the likelihood of approval, which could further solidify Bitcoin’s position as the only cryptocurrency recognized at an institutional level.
