Bitcoin Positive Outlook After Interest Rate Cut

Bitcoin (BTC) and the wider digital asset market are expected to see sustained growth following the U.S. Federal Reserve’s recent 50 basis point interest rate cut, according to Standard Chartered’s Geoff Kendrick.

Interest Rate Cut and Market Impact

Kendrick, the bank’s head of forex and digital assets research, noted that macroeconomic factors will likely influence digital asset prices positively, regardless of the outcomes of the upcoming U.S. presidential election in November.

He pointed out that after the Federal Open Market Committee’s (FOMC) meeting, digital assets have surged in performance. “Post the FOMC meeting, digital assets are at the top of the pack in terms of performance. This comes despite Polymarket showing a 52/47 lead for Kamala Harris,” Kendrick mentioned in an email. He believes this is because macroeconomic elements are beginning to overshadow uncertainties linked to the election.

Kendrick went on to state that the presidential election’s impact on bitcoin prices is diminishing. “While the U.S. election is important, macro drivers are starting to take over,” he asserted. He is closely observing the disparity between short-term and long-term Treasury yields as a sign of market conditions favorable for digital assets. “I watch the U.S. 2s10s curve, and a steeper U.S. yield curve is digital asset positive,” he stated.

Since July 2022, the yield difference between two Treasury bonds had been negative, with markets perceiving it as a recession signal. However, the spread turned positive again by the end of August.

Increased investments in spot bitcoin exchange-traded funds (ETFs) may also bolster bitcoin’s price soon, Kendrick noted, urging to watch for renewed ETF inflows in October.

He clarified that these projections depend on ongoing positive macroeconomic trends rather than political developments. Kendrick reiterated his prediction that bitcoin might hit new all-time highs by year’s end, with potential targets of $125,000 if Donald Trump wins and $75,000 if Kamala Harris prevails.