Bitcoin BTC
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The stock is showing upward momentum that could push it up to its pre-election price of $73,800, according to Geoff Kendrick of Standard Chartered.
This potential price rise is being fueled by a combination of factors, including a steepening U.S. Treasury yield curve, renewed market interest in physical Bitcoin exchange-traded funds, and the rising odds of Donald Trump winning the upcoming U.S. presidential election. Kendrick added.
“For Bitcoin, this combination of factors is likely to push it towards a pre-election all-time high of $73,800,” Standard Chartered’s global head of digital asset research said in a note on Tuesday.
Kendrick observed that as the yield curve (the difference between 2-year and 10-year U.S. Treasury yields) steepened in the 2010s, Bitcoin and other digital assets “finally started to rise.” Estimated US CPI data released on Thursday. A shift in the yield curve signals increased market volatility and expectations of potential interest rate hikes, which often increases demand for alternative assets such as Bitcoin.
Election Outlook and Bitcoin Price Trajectory
Kendrick also highlighted that Donald Trump’s odds of winning have increased to 56.3% according to the Polymarket prediction platform, which could be an important factor driving Bitcoin’s upward momentum with only three weeks left until the US presidential election.
The probability of a landslide victory for the Republican Party, a scenario in which Trump wins and the Republican Party controls both the Senate and the House of Representatives, is 39%. Kendrick explained, “Based on the conditional probability, if Trump wins, there is a 70% probability that the Republican Party will win a landslide victory, which can create favorable conditions for risk assets, including Bitcoin.”
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Kendrick also highlighted recent inflows into spot Bitcoin ETFs and increased activity in derivatives markets as key factors driving Bitcoin’s upward trajectory. according to to data At SoSoValue, U.S. spot Bitcoin ETFs recorded their largest daily net inflow since June, totaling $555.8 million on Monday. Of the 12 spot Bitcoin ETFs, 10 had net inflows and none had net outflows.
On the options side, analysts at Standard Chartered noted increased activity for Bitcoin call options with a strike price of $80,000 expiring December 27 on the Deribit cryptocurrency derivatives exchange. “Last week, 1,500 bitcoins were added to the open interest on the $80,000 call,” he said. This suggests that institutional investors are taking a significant upward swing in the medium term.
MicroStrategy’s Role in Bitcoin’s Institutional Adoption
Kendrick also discussed the rising net asset value multiple of MicroStrategy stock compared to the price of Bitcoin. MicroStrategy, which holds more than 252,000 Bitcoin, has seen its stock price outperform Bitcoin in recent weeks, with its NAV multiple reaching its highest level in three years. Kendrick suggested that this difference could be linked to increased confidence in MicroStrategy’s evolving role in the digital asset space.
Analysts at Standard Chartered said one factor driving MicroStrategy’s stock price higher could be BNY Mellon’s September 16 announcement that it had received an exemption from SAB 121, the U.S. accounting rule governing how companies hold and report digital assets. Kendrick explained that this exemption will allow MicroStrategy to engage in Bitcoin lending activities, opening up new revenue streams for the company. “This creates the possibility for MSTR’s new counterparties to earn a rate of return on the 252,000 Bitcoins they hold by lending them Bitcoin, and MSTR’s plan is to create ‘Bitcoin capital markets across equities, convertibles and fixed assets. The ‘income and preferred stock’ will become more evident as a Bitcoin bank in its core business of creating products,” Kendrick added.
Kendrick said that both MicroStrategy and the spot Bitcoin ETF are poised to benefit from increased institutional interest as the digital asset ecosystem becomes more integrated into traditional financial markets. He emphasized that this increased legitimacy, along with favorable political developments, could provide a tailwind for Bitcoin and other digital assets in the coming months. He added that even if Trump doesn’t win, “the broader trend toward digital asset adoption remains intact.”
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