In a research document dated October 24, Geoff Kendrick, the Global Head of Digital Assets Research at Standard Chartered Bank, suggests that Bitcoin might soar to $125,000 by the year’s end if former President Donald Trump wins the forthcoming US presidential election.
When Bitcoin Could Reach $125,000
Kendrick’s assessment is based on the connection between Bitcoin’s price shifts and the US political climate. “We analyze daily BTC volatility levels and prevalent strike prices to gauge price fluctuations after the election,” he mentions in the report titled Bitcoin – Post-US Election Playbook. Kendrick notes that Bitcoin prices have been rising in recent weeks, which corresponds with other investments preferred by Trump supporters.
The report estimates that Bitcoin could reach around $73,000 by Election Day on November 5, which is close to its all-time high of $73,800 set in March. “Our base case suggests Bitcoin will climb to about $73,000 by Election Day, reflecting betting-market expectations of a Trump victory,” Kendrick remarks.
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Betting markets indicate growing confidence in a Trump win. “RealClearPolitics shows the average betting odds for a Trump victory at 59%. Moreover, conditional probabilities from specific betting platforms (Polymarket) indicate a 75% likelihood of a Republican sweep if Trump secures the presidency,” the report indicates.
If Trump emerges victorious, Kendrick expects immediate bullish momentum for Bitcoin. “In the event of a Trump win, options break-even suggests a further rise of about 4% once the presidential outcome is confirmed, and around 10% overall within a few subsequent days,” he explains.
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The prospect of a Republican sweep in Congress enhances this forecast. “Should Republicans dominate Congress, our target of USD 125,000 by year-end seems achievable,” Kendrick insists. This expectation is supported by high open interest in Bitcoin call options poised to expire on December 27 at the $80,000 strike price, implying a swift movement towards that benchmark.
What If Harris Wins?
Conversely, if Vice President Kamala Harris wins, the report anticipates a temporary decline in Bitcoin prices. “If Harris takes the lead, we expect BTC to initially dip but still conclude 2024 at new highs around $75,000,” Kendrick predicts. This reflects a strong long-term outlook for Bitcoin, despite differing degrees of gains based on the election outcome.
Kendrick underlines the significance of options market data in predicting potential price changes. “Options information assists in forecasting initial price movements post-election,” he mentions. The substantial trading volumes and key strike prices act as indicators of investor sentiment and market positioning leading up to the election.
The recent decline in Bitcoin’s price to a local low of $65,200 was also addressed. Kendrick suggests this might be “the last dip before the U.S. presidential election,” indicating that any immediate corrections could be overshadowed by upcoming political events.
At the time of writing, BTC was priced at $67,520.
Featured image created with DALL.E, chart from TradingView.com
