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According to Standard Chartered’s Jeff Kendrick, the overall digital asset market is expected to continue its upward trend following the US Federal Reserve’s recent decision to cut interest rates by 0.50 percentage points.
The bank’s head of foreign exchange and digital asset research said that regardless of the outcome of the US presidential election in November, digital asset prices will rise due to macroeconomic factors.
Interest rate cuts and market impact
Kendrick highlighted the bullish sentiment in Bitcoin and other digital assets following Wednesday’s Federal Open Market Committee (FOMC) rate cut.
“Digital assets have been the outperformers for the first time in a while since the FOMC meeting, despite Polymarket showing Kamala Harris ahead 52/47 today,” Kendrick said in an email Thursday. He attributed the positive performance to macroeconomic factors beginning to outweigh election-related uncertainty.
Kendrick argues that the US presidential election has less of an impact on Bitcoin prices than it did in the past.
“The US election is important, but macroeconomic factors are starting to take over,” he said. Kendrick said he is monitoring the difference between short-term and long-term US Treasury yields as an indicator of market conditions that are favorable for digital assets. “I’m watching the US 2s10s curve, and a steeper US yield curve is positive for digital assets,” he added.
Since July 2022, the spread between the yields of the two Treasury bonds has been negative (or “inverted”). The market interpreted this as a sign that a recession was coming. However, the spread began to turn positive again in late August.
Another factor supporting the Bitcoin price, according to Kendrick, is the potential for increased investment in spot Bitcoin exchange-traded funds (ETFs) in the near future. “Watch for a resumption of spot Bitcoin exchange-traded fund inflows in October,” he added.
However, he stressed that these predictions depend on continued positive macroeconomic factors rather than political outcomes. Kendrick then reiterated his previous prediction that Bitcoin would reach a new all-time high by the end of the year, with potential targets of $125,000 if Donald Trump wins and $75,000 if Kamala Harris wins.
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