Trump's Potential Return Could Spur Crypto Growth, Standard Chartered Report Suggests

Zinger Key Points
  • Analyst Geoff Kendrick identifies a positive correlation between Bitcoin prices and potential U.S. fiscal policy developments.
  • Trump's potential reelection could reduce foreign purchases of U.S. Treasuries, echoing trends from his first term.

The prospect of Donald Trump returning to the presidency might significantly bolster the cryptocurrency sector, according to a recent research report by Standard Chartered.

What Happened: The investment bank forecasts that a second Trump administration could enhance the regulatory environment for digital assets, potentially leading to a surge in cryptocurrency valuations, Coindesk reported.

In the report released on Tuesday, Standard Chartered outlines how the increasing risk of U.S. fiscal dominance and the Federal Reserve’s approach to government debt monetization are likely to drive investors towards alternative assets like cryptocurrencies.

“We think that a second Trump administration would be broadly positive via a more supportive regulatory environment,” the report notes, emphasizing the potential benefits of such a political shift.

Geoff Kendrick, the analyst behind the report, further explains that the scenario of U.S. fiscal dominance under Trump could positively impact Bitcoin BTC/USD and other cryptocurrencies.

He highlights that this could lead to a “steeper nominal 2-year/10-year curve, a greater increase in break evens than real yields, and an increase in term premium.” Kendrick adds that the “Bitcoin price has a positive correlation with all three of these potential developments.”

The analysis also touches on historical trends, pointing out that during Trump’s first term, there was a noticeable withdrawal of foreign official buyers from the U.S. Treasury market, with an average annual net selling of $207 billion, compared to just $55 billion under President Joe Biden‘s tenure.

This trend could accelerate under a second Trump term, furthering the de-dollarization push and potentially boosting Bitcoin and other digital assets.

Also Read: Binance CEO Calls For Colleague’s Release Amid Standoff With Nigeria

Moreover, the report suggests that not only would a Trump presidency passively support cryptocurrencies through these broader economic dynamics, but it could also actively encourage their growth.

“In addition to the passive boost to BTC from de-dollarization, 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,” the report states.

With an optimistic outlook on the cryptocurrency market, Standard Chartered has set a target for Bitcoin to reach $150,000 by the end of this year and $200,000 by the end of 2025.

What’s Next: As the discussion on the impact of political figures on digital assets continues, Benzinga’s upcoming Future of Digital Assets event on Nov. 19 will provide a crucial platform for exploring how potential political changes could shape the landscape of cryptocurrency investments.

Read Next: Crypto ‘An Outsized Piece Of The Scams And Problems’ In Markets: Gary Gensler

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