According to the report, there could be a benefit for cryptocurrency if Trump wins the election because his administration would probably work to create more favorable regulations.
- The risk of U.S. fiscal dominance and the monetization of government debt, according to the report, may cause investors to look for alternative assets like cryptocurrency.
- According to Standard Chartered, digital assets may benefit from a Trump victory in the election.
- The bank restated its goal of $150,000 for the end of the year and $200,000 for the end of 2025 for the price of bitcoin.
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Investment bank Standard Chartered stated in a research report on Tuesday that there is an increasing risk of U.S. fiscal dominance due to the Federal Reserve’s monetization of government debt. In light of investors’ search for alternative assets, this scenario should be favorable for cryptocurrencies.
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Another potential benefit for cryptocurrencies is Donald Trump. According to the report, “We believe that a more supportive regulatory environment under a second Trump administration would be broadly positive.” “We believe bitcoin (BTC) would provide a good hedge against de-dollarization and declining confidence in the U.S. Treasury market in a scenario of U.S. fiscal dominance,” analyst Geoff Kendrick wrote.
According to Kendrick, there is a positive correlation between the price of bitcoin and all three of these potential developments. He stated that the U.S. Treasury curve would likely experience “a steeper nominal 2 year/10 year curve, a greater increase in breakevens than real yields, and an increase in term premium” as a result of its fiscal dominance.
The bank noted that if Trump were to win, a second administration might quickly withdraw foreign official purchasers of US Treasury bonds because of financial worries. During his first term, the average annual net selling of US government debt was $207 billion, compared to just $55 billion during Biden’s presidency.
The report went on, “We would expect a second Trump administration to be actively supportive of BTC (and digital assets more broadly) via looser regulation and the approval of U.S. spot ETFs, in addition to the passive boost to BTC from de-dollarization.” Standard Chartered restated its goal of $150,000 for bitcoin by year’s end and $200,000 by year’s end in 2025.
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