Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Standard Chartered’s global head of digital assets research, Geoff Kendrick, anticipates that Bitcoin’s price will dip below $100,000 amidst a “fear-driven selloff” linked to U.S.-China tariff developments. Despite this projected short-term decline, Kendrick maintains his year-end price target of $200,000 for the leading cryptocurrency. As of Wednesday, Bitcoin was trading around $108,200, having already seen a 12% decrease from its recent all-time high of $126,000 over the past 16 days.
Market Dynamics and Price Predictions
Kendrick suggested that a temporary drop below the $100,000 psychological barrier appears “inevitable.” He posited that this could mark the “last time” Bitcoin trades at such a valuation, though he acknowledged the inherent uncertainty of predicting the exact bottom before the asset finds a new base. This current market volatility is largely attributed to the ongoing trade tensions between the United States and China.
Historically, October and November have been Bitcoin’s strongest months, famously dubbed “Uptober” by market observers, with average gains of 19.8% and 46% respectively since 2013, according to CoinGlass. However, the current market dynamics differ significantly from previous years. Bitcoin previously plunged to $76,300 in April following announcements of “reciprocal” tariffs by the White House.
Gold and Geopolitical Context
In recent months, gold, traditionally a safe-haven asset, had outperformed Bitcoin. This trend, however, showed signs of reversal on Tuesday when a sharp gold selloff coincided with a strong intraday bounce for Bitcoin. Kendrick interpreted this as a potential “sell gold, buy Bitcoin” flow, suggesting it could be constructive for a Bitcoin low. Gold’s price continued to slip on Wednesday, trading around $4,075 per ounce after reaching a record $4,381 just days prior.
The broader economic climate, influenced by geopolitical tensions, plays a crucial role in these market movements. The Trump administration has been actively pursuing trade deals with various nations, including China, the U.S.’s largest trading partner. Concurrently, reports indicate India may soon reach an agreement with the U.S. to reduce oil purchases from Russia, with crude oil prices seeing a 2.3% rise to $58.5 a barrel.
Outlook
Despite the immediate downturn driven by macroeconomic concerns, the long-term outlook for Bitcoin, as presented by Standard Chartered, remains optimistic. The anticipated dip below $100,000 is framed as a potentially fleeting event before a significant push towards new record highs later in the year.
