Standard Chartered Advises on Bitcoin Amid Geopolitical Uncertainty
Standard Chartered indicates that geopolitical risks, particularly from the Middle East conflict, may push Bitcoin below $60K soon. While recommending investors buy the dip, the bank clarifies that Bitcoin is not a safe haven against such risks and mainly serves as a hedge against traditional financial instabilities. Institutional buying persists despite market declines, reflecting optimism about Bitcoin’s resilience.
Standard Chartered has released a report suggesting that the conflict in the Middle East is likely to negatively impact Bitcoin prices, potentially bringing them below the $60,000 threshold before the weekend. Despite this anticipated decline, the investment bank encourages investors to take advantage of the dip. According to Standard Chartered, Bitcoin should not be viewed as a safe haven in response to geopolitical risks, as it functions primarily as a hedge against more conventional financial disturbances, such as bank failures or issues stemming from de-dollarization or U.S. Treasury challenges. Geoff Kendrick, the global head of digital assets research at Standard Chartered, emphasized that while gold serves as a hedge against geopolitical uncertainty, Bitcoin is aligned more with traditional financial system vulnerabilities. Moreover, geopolitical tensions are believed to have both suppressed Bitcoin prices and increased the likelihood of Donald Trump succeeding in the upcoming U.S. elections, which could consequently favor Bitcoin’s performance post-election. The options market also reflects this optimistic outlook, with a noted rise in open interest for Bitcoin contracts expiring in December. Additionally, Ryan Lee of Bitget Research mentioned that institutional investors are maintaining strong buying activity, with purchases meeting or exceeding daily Bitcoin production, despite prevailing market downturns. At the time of writing, Bitcoin was priced around $60,500, marking a slight decrease of approximately 0.4% for the day, while the broader cryptocurrency market, represented by the CoinDesk 20 index, experienced a decline of 5.5%.
The dynamics of Bitcoin’s market performance are significantly influenced by geopolitical events. Recent conflicts in the Middle East have raised concerns about Bitcoin’s ability to act as a protective asset during periods of international turmoil. Standard Chartered’s analysis indicates that while Bitcoin is often considered a traditional financial asset, its responses to geopolitical risks differ from those of commodities like gold. Instead, Bitcoin is characterized more as a safeguard against domestic financial instabilities rather than international strife. Understanding how Bitcoin correlates with traditional financial systems and political events provides investors with essential insights into its trading behavior and potential future value.
In conclusion, while Standard Chartered forecasts a potential decline in Bitcoin prices related to geopolitical risks from the Middle East, it advocates for investors to consider purchasing during this dip. The report elucidates that Bitcoin should not be viewed as a refuge from geopolitical concerns but rather as a hedge against traditional financial adversities. Institutional investor behavior remains strong, suggesting confidence in the long-term viability of Bitcoin despite short-term volatility.
Original Source: www.coindesk.com
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