According to CoinDesk, Standard Chartered said in a research report on Tuesday that risks of U.S. fiscal dominance are increasing as the Federal Reserve monetizes government debt, a situation that should be positive for cryptocurrencies as investors seek alternative assets. Analysts at the bank wrote in the report:
“In a U.S. fiscal-dominated scenario, we believe Bitcoin (BTC) would be a good hedge against dollarization and declining confidence in the U.S. Treasury market.”
Analysts added that the risk of U.S. fiscal dominance is likely to have three impacts on the U.S. Treasury curve, namely: a steeper two-year/ten-year nominal yield curve, an increase in the breakpoint that exceeds real yields, and maturity Premiums increase, and Bitcoin’s price is positively correlated with these three potential developments.
In addition, analysts at Standard Chartered Bank also pointed out that Donald Trump may also become a major catalyst for the rise of cryptocurrencies, as the second Trump administration will be more favorable to cryptocurrencies in general by providing a more favorable regulatory environment. Currency has a positive impact.
“In addition to the passive boost to BTC from de-dollarization, we expect the second Trump administration to actively support BTC (and a wider range of digital assets) by relaxing regulations and approving U.S. spot ETFs.”
Analysts note that if Trump wins a second term, the withdrawal of foreign official buyers of U.S. Treasuries could accelerate due to fiscal concerns. Net sales of U.S. government debt averaged $207 billion per year during his first term, compared with just $55 billion under President Biden.
In addition, Standard Chartered Bank also reiterated its year-end Bitcoin price target of $150,000 and the end of 2025 of $200,000 in the report.
This article Standard Chartered Bank points out two major catalysts for the cryptocurrency market: the risk of US fiscal dominance and Trump’s election first appeared on Zombit.
