Bitcoin BTC
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and the broader digital asset market are poised for a sustained boost following the U.S. Federal Reserve’s recent decision to cut interest rates by 50 basis points, according to Standard Chartered's Geoff Kendrick.
The bank's head of forex and digital assets research suggested that macroeconomic factors will drive digital asset prices higher, irrespective of the outcome of the upcoming U.S. presidential election in November.
Interest rate cut and market impact
Kendrick highlighted that bitcoin and other digital assets are performing strongly after Wednesday's Federal Open Market Committee’s (FOMC) rate cut.
"Post the FOMC meeting and digital assets are at the top of the pack in terms of performance, for the first time in a while. This comes despite Polymarket today showing a 52/47 lead for Kamala Harris," Kendrick noted in an email on Thursday. He attributes this positive performance to macroeconomic drivers beginning to outweigh election-related uncertainties.
Kendrick asserts that the impact of the U.S. presidential election on bitcoin’s price is less significant than it was in the past.
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"While the U.S. election is important, macro drivers are starting to take over," he said. Kendrick indicated that he is monitoring the difference between short-term and long-term U.S. Treasury yields as an indicator of market conditions that are beneficial for digital assets. "I watch the U.S. 2s10s curve, and a steeper U.S. yield curve is digital asset positive," he added.
Since July 2022, the spread between yields on the two Treasury bonds has been negative (or "inverted"). Markets took that to mean a recession was looming. However, the spread began to turn positive again at the end of August.
Also supporting bitcoin's price, according to Kendrick, could be increased investment in spot bitcoin exchange-traded funds (ETFs) in the near future. "Watch for renewed spot bitcoin exchange-traded fund inflows in October," he added.
However, he emphasized that these predictions are contingent on ongoing positive macroeconomic factors rather than political outcomes. Kendrick then reiterated his previous prediction that bitcoin will reach new all-time highs 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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