Standard Chartered Bank’s global head of digital asset research has highlighted several factors that could support Bitcoin prices in the coming months.
Kendrick said that since the Federal Reserve cut the federal funds rate last week, long-term borrowing costs have become relatively higher for U.S. Treasury bonds than short-term borrowing costs, which often signals optimism about future economic growth and creates a favorable environment for investments, including bitcoin.
“There are several factors pointing to a sharp breakout in bitcoin,” Kendrick told The Block in an email. “The steeper yield curve has helped since the Fed cut rates, and that has continued this week, with 2-year and 10-year Treasury bonds currently trading at around 21 basis points.”
Optimistic indicators for the derivatives market
The global head of digital asset research at Standard Chartered pointed to the derivatives market trends to support his bullish view on Bitcoin. “This week we have seen the addition of new topside Bitcoin calls for the December 27 options expiry. This interest has largely been built around the $100,000 round strike price figure,” Kendrick added.
The Standard Chartered analyst said the growth in open interest surrounding top Bitcoin options has accelerated at a rate that cannot be attributed solely to the digital asset’s roughly 6% price rally last week. Kendrick explained that the notable increase in open interest at the $100,000 strike price suggests that other factors are influencing derivatives traders’ decisions.
According to Kendrick, Vice President Kamala Harris’ recent comments at a fundraising event in New York have emerged as a new major factor influencing the markets.On Sunday, she emphasized her commitment to encouraging innovation while protecting consumers and investors, as she expressed her commitment to supporting emerging technologies including artificial intelligence and digital assets.
“The most likely new element from a timing standpoint is Vice President Harris’s comments on Sunday, September 22nd, that she would encourage cryptocurrency businesses, which suggests that both outcomes on November 5th would be positive for Bitcoin,” he added.
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