TLDR
- Standard Chartered believes Bitcoin may never drop below $100,000 again.
- Improved U.S.-China trade talks have lifted Bitcoin’s price potential.
- Bitcoin’s gold ratio and ETF inflows signal positive market sentiment.
- A rate cut by the Fed could help Bitcoin maintain its value above $100K.
Standard Chartered Bank has suggested that Bitcoin might not fall below $100,000 again, provided the positive macroeconomic and geopolitical trends continue. Geoffrey Kendrick, the bank’s head of digital assets research, pointed to improving trade talks between the U.S. and China as a factor contributing to this optimism. He also noted other key indicators that signal the possibility of Bitcoin remaining above this critical threshold.
Improving U.S.-China Relations Boost Sentiment
Geoffrey Kendrick emphasized that the recent easing of tensions between the U.S. and China has played a crucial role in improving market sentiment. Trade talks between the two nations have shown signs of progress, particularly with the potential delay of China’s rare-earth export controls.
In addition, the U.S. and China are working toward an agreement where China would purchase significant quantities of U.S. soybeans. This deal, still being finalized, is expected to be a positive development for global markets.
The easing of trade fears has reflected in various sectors, including cryptocurrencies. As market uncertainty has lessened, Bitcoin’s value has risen, leading to a stronger correlation between Bitcoin and gold. The Bitcoin-gold ratio has climbed back to levels seen before the October 10 sell-off, which was sparked by fears of a 100% tariff on Chinese imports. Kendrick sees a further rise in this ratio as a clear sign of reduced market fear.
Bitcoin ETF Inflows and Potential for New All-Time High
A significant point of focus for Kendrick is the expected inflow of capital into Bitcoin exchange-traded funds (ETFs). This trend could indicate that investor confidence is returning to the cryptocurrency market. Kendrick pointed out that more than $2 billion exited U.S. gold ETFs recently, and if a portion of this capital moves into Bitcoin ETFs, it could signal a shift toward positive market sentiment.
He further stated that an increase in Bitcoin ETF inflows would be a strong indicator of renewed confidence in the market. Bitcoin’s ability to attract investment through ETFs would represent a key moment in the cryptocurrency’s development, potentially leading to an all-time high.
Kendrick believes that such a high would challenge the theory that Bitcoin’s price is primarily driven by its halving cycle. According to him, ETF flows will be a more reliable signal of Bitcoin’s future price direction.
Federal Reserve Rate Cut as a Positive Development
Another factor that could support Bitcoin’s continued rise is the expected rate cut by the U.S. Federal Reserve. Kendrick noted that a 25-basis-point rate cut is anticipated following the Federal Open Market Committee (FOMC) meeting this week.
Historically, lower interest rates have been seen as beneficial for risk assets, including Bitcoin. This rate cut is seen as an important development for the crypto market, signaling that the central bank is maintaining a favorable environment for investments in digital assets.
Alongside the rate cut, Kendrick highlighted the busy week of earnings reports from major tech companies. These reports could further influence market sentiment, adding to the overall positive outlook for risk assets, including Bitcoin. Kendrick suggests that if these factors play out as expected, Bitcoin could firmly stay above the $100,000 mark.
