Standard Chartered Bank has suggested that Bitcoin might never see the $100,000 mark again, driven by a wave of positive macroeconomic and geopolitical trends. Geoffrey Kendrick, the bank’s head of digital assets research, indicated that improving trade relations between the U.S. and China play a significant role in this bullish outlook, along with several other indicators highlighting Bitcoin’s durability.
Improving U.S.-China Relations Boost Sentiment
Kendrick emphasized that the recent thaw in relations between the U.S. and China has notably improved market sentiment. Trade negotiations between the two economic giants have shown encouraging signs, particularly with plans to postpone China’s controversial rare-earth export control measures.
Moreover, the U.S. and China are pursuing an agreement where China would buy substantial quantities of U.S. soybeans, a deal still under finalization that is expected to bolster global market stability.
The reduced anxiety surrounding trade policy has positively impacted various sectors, including cryptocurrencies. With market uncertainties easing, Bitcoin has experienced a price uptick, heightening the correlation between Bitcoin and gold. The Bitcoin-gold ratio has shown signs of recovery, returning to levels reminiscent of the period before the intense market sell-off on October 10, which was driven by fears regarding potential tariffs on Chinese imports. Kendrick sees this increase in the ratio as a direct reflection of declining market fears.
Bitcoin ETF Inflows and Potential for New All-Time High
A key focus for Kendrick lies in the expected capital influx into Bitcoin exchange-traded funds (ETFs). He pointed out that investor confidence appears to be regaining momentum. Recently, over $2 billion exited U.S. gold ETFs, and should a portion of this capital flow into Bitcoin ETFs, it could signify a turning point in market sentiment.
Kendrick believes that an uptick in Bitcoin ETF inflows would stand as a robust indicator of renewed investor trust in the cryptocurrency sector. The ability of Bitcoin to attract investment via ETFs could mark a pivotal moment in its evolution, potentially paving the way toward new all-time highs.
He further mentioned that such heights could contradict the prevailing theory that Bitcoin’s pricing solely hinges on its halving cycle, asserting that ETF capital flows would offer a clearer forecast for Bitcoin’s market trajectory.
Federal Reserve Rate Cut as a Positive Development
Another element that may aid Bitcoin’s continued ascendance is the anticipated interest rate cut by the U.S. Federal Reserve. Kendrick noted that a 25-basis-point reduction is likely following the upcoming Federal Open Market Committee (FOMC) meeting.
Historically, lower interest rates have favored risk assets, with Bitcoin standing to benefit significantly from this trend. This rate cut is viewed as a critical positive shift for the cryptocurrency landscape, reinforcing a favorable investment climate for digital assets.
Furthermore, Kendrick highlighted a busy earnings week for major tech firms, which could further steer market sentiment in Bitcoin’s favor. Should these circumstances unfold as predicted, it could result in Bitcoin solidly maintaining its position above the $100,000 threshold.
