Bitcoin Poised for Rally Following Federal Reserve Rate Cut, According to Standard Chartered

Cryptonews Economy John Brightwater September 19, 2024

Bitcoin Poised for Rally Following Federal Reserve Rate Cut, According to Standard Chartered

Summary
Geoff Kendrick of Standard Chartered projects a rally for Bitcoin and digital assets following the Federal Reserve’s rate cut, citing macroeconomic factors over political outcomes as the main drivers. He notes a positive performance trend for Bitcoin post-FOMC announcement and believes that the influence of the U.S. presidential election on Bitcoin prices is diminishing. Kendrick suggests that the yield curve and potential influx of Bitcoin ETFs will significantly impact the digital asset market.

Standard Chartered’s Geoff Kendrick has forecasted a significant rally in Bitcoin and other digital assets stemming from the recent interest rate cut by the Federal Reserve, attributing this expected surge more to favorable macroeconomic conditions than the outcome of the upcoming U.S. presidential election. In his analysis, Kendrick notes that Bitcoin and similar assets have shown strong performance following the Federal Open Market Committee’s (FOMC) rate cut announcement. He observed that, for the first time in a while, digital assets are leading in performance indicators, despite polls indicating a narrow lead for Kamala Harris in the presidential race. This positive trend, Kendrick suggests, indicates that macroeconomic factors are beginning to supersede uncertainties related to the election. Kendrick elaborates on the diminishing impact of political events on Bitcoin’s price. “While the U.S. election is important, macro drivers are starting to take over,” he remarked, emphasizing that he is closely watching the yield curve between short-term and long-term U.S. Treasuries as a key indicator of market conditions favorable for digital assets. Since a negative spread between these bond yields often signals a recession, the recent positive change in this spread could be advantageous for Bitcoin’s performance. Additionally, Kendrick anticipates increased investments in spot Bitcoin exchange-traded funds (ETFs) as a contributing factor to Bitcoin’s rising price. He suggests that market participants should “watch for renewed spot bitcoin exchange-traded fund inflows in October.” Despite the reliance on macroeconomic conditions, Kendrick maintains a bullish outlook for Bitcoin, reiterating his prior prediction that Bitcoin may attain new all-time highs by the year’s end, with two potential targets: $125,000 in the event of a Trump victory and $75,000 should Kamala Harris emerge victorious.

The discussion surrounding Bitcoin’s price performance often intertwines with macroeconomic indicators and political events, notably those associated with the U.S. presidential election. Since Bitcoin’s inception, its price has been influenced by economic conditions, thus creating expectations regarding its performance relative to interest rate policies set by central banks like the Federal Reserve. The Federal Reserve’s recent decision to cut interest rates has reinvigorated discussions about potential growth for Bitcoin and other digital assets. Market speculation also frequently ties the performance of cryptocurrencies to political changes, although experts such as Kendrick suggest a shift towards relative independence from political outcomes in favor of broader economic indicators.

In summary, Standard Chartered’s Geoff Kendrick anticipates a significant rally in Bitcoin driven primarily by macroeconomic factors in the wake of the Federal Reserve’s rate cut. While political factors have historically influenced Bitcoin’s price, current analysis indicates a decisive shift toward macroeconomic drivers. Kendrick’s optimistic forecast suggests potential new all-time highs for Bitcoin by the end of the year, which he attributes to the anticipated performance of spot Bitcoin ETFs and improving economic conditions.

Original Source: www.theblock.co