Bitcoin
Bitcoin (BTC) could benefit from Trump victory and US fiscal dominance: Standard Chartered
The risk of US fiscal dominance from the Federal Reserve’s monetization of government debt is growing, and such a scenario should support cryptocurrencies as investors look for alternative assets, investment bank Standard Chartered said in a research report on Tuesday. -fair.
Donald Trump could also be a boon for cryptocurrencies. “We believe a second Trump administration would be broadly positive through a more favorable regulatory environment,” the report said. “In a scenario of US fiscal dominance, we think bitcoin (BTC) would provide a good hedge against de-dollarization and declining confidence in the US Treasury market,” wrote analyst Geoff Kendrick.
U.S. fiscal dominance would likely have three effects on the U.S. Treasury curve: “a steeper 2/10-year nominal curve, a larger increase in break-even points than in real yields, and an increase in the term premium,” he said. Kendrick, adding that the price of bitcoin has increased. a positive correlation with all three of these potential developments.
If Trump were to win the election, a second administration could accelerate the withdrawal of official foreign buyers from the U.S. Treasury due to fiscal concerns, the bank said, noting that in his first term the average annual net sale of U.S. government debt was 207 billion dollars a year, versus just $55 billion under a Biden presidency.
“In addition to the passive boost to BTC due to dedollarization, we would expect a second Trump administration to actively support BTC (and digital assets more broadly) through looser regulation and the approval of US spot ETFs,” he added the report. Standard Chartered reiterated its year-end bitcoin target of $150,000 and $200,000 by year-end 2025.