The digital asset market, including Bitcoin (BTC/USD), is poised for sustained growth following the U.S. Federal Reserve’s recent decision to cut interest rates by 50 basis points. This is according to Geoff Kendrick, head of forex and digital assets research at Standard Chartered.
While political factors, including the upcoming U.S. presidential election, still hold some weight, Kendrick emphasizes that macroeconomic trends are now the primary drivers of digital asset prices. The recent Federal Open Market Committee (FOMC) meeting, which resulted in the rate cut, has provided a significant boost to digital assets.
“Post the FOMC meeting, digital assets are at the top of the pack in terms of performance, for the first time in a while,” Kendrick stated in an email on Thursday. This surge in performance comes despite a close election contest, with Polymarket predicting a 52/47 lead for Kamala Harris. However, Kendrick believes the U.S. presidential election’s influence on Bitcoin’s price has diminished compared to previous cycles.
“While the U.S. election is important, macro drivers are starting to take over,” he explained. He specifically highlighted the U.S. Treasury yield curve, saying, “I watch the U.S. 2s10s curve, and a steeper U.S. yield curve is digital asset positive.”
The yield curve, which had been inverted since July 2022, has recently returned to a positive slope, indicating a shift in market sentiment that could further support digital asset prices.
Kendrick also sees potential for increased investment in spot Bitcoin exchange-traded funds (ETFs) in the coming months, providing additional tailwinds for the market. “Watch for renewed spot bitcoin exchange-traded fund inflows in October,” he added.
While acknowledging the relevance of the political landscape, Kendrick emphasizes that the broader macroeconomic environment, including interest rate changes and market liquidity, will have a more substantial impact on Bitcoin’s price trajectory.
Kendrick reaffirms his earlier forecast, predicting Bitcoin could hit new all-time highs by the end of 2024, potentially reaching $125,000 if Donald Trump wins the presidency and $75,000 if Kamala Harris emerges victorious. This forecast surpasses Deutsche Bank’s survey, where only 12% of respondents expect Bitcoin to exceed $70,000 by year-end.
As the digital asset market continues to evolve, these macroeconomic shifts and their influence on cryptocurrency will be key topics of discussion at Benzinga’s Future of Digital Assets event on Nov. 19, where industry leaders will explore how regulatory changes, economic factors, and political developments are shaping the future of digital finance.
