Bitcoin under short-term downward pressure
Bitcoin, after reaching a peak near $99,645 last week, has now dropped below $94,000. According to Geoff Kendrick, a digital asset research expert at Standard Chartered Bank, the price of Bitcoin may continue to decline, hitting a short-term bottom at $88,700.
Main reason: New financial policy
This decline is believed to stem from Scott Bessent, a hedge fund manager known for his conservative financial views, being appointed as Secretary of the Treasury in the administration of President-elect Donald Trump. Bessent is expected to rein in Trump's tariff policy, causing U.S. bond yields to rise, diminishing the demand for Bitcoin as an inflation hedge.
Bitcoin and the role of financial hedging
Bitcoin is often seen as a hedge against weak monetary policy and inflation. However, with the recovery of U.S. Treasury bonds, investors are returning to traditional financial markets.
The aftermath of Donald Trump's victory
Trump's surprising victory in the November 5 election created strong momentum for Bitcoin. The price of Bitcoin rose from below $70,000 on election night to a peak near $100,000. Trump's commitments to tax cuts, deregulation, and support for the digital asset industry have made investors optimistic.
Long-term forecast: Bitcoin continues to rise strongly
Despite a short-term decline, Kendrick predicts Bitcoin will reach $125,000 by the end of this year and may hit $200,000 by the end of 2025.
Conclusion
Bitcoin is facing a correction due to changes in the financial policy environment. However, the long-term outlook remains very positive, especially as the commitments to support the crypto industry by the Trump administration continue to be implemented.