This year has seen remarkable growth for the world’s largest cryptocurrency, particularly Bitcoin (CRYPTO: BTC), which has recently surged by an impressive 14% over the past month alone. This upward trend can largely be attributed to the anticipation surrounding Donald Trump’s potential victory in the upcoming Election Day. Financial markets are also beginning to brace for the possibility of a Republican majority in Congress, with current polling indicating a favorable outlook for the GOP to capture the U.S. Senate. Meanwhile, the U.S. House of Representatives remains a tightly contested race. The unpredictable nature of these elections means that outcomes could differ substantially from predictions, as both polling data and betting markets have historically miscalculated results. Should the Republicans achieve a sweeping victory in Congress, one Wall Street expert forecasts that Bitcoin could witness a staggering 75% increase by the end of this year.
Indeed, many financial analysts contend that Trump and the Republican Party would implement more favorable legal frameworks and regulations for cryptocurrency if they regain control. Geoff Kendrick, an analyst at Standard Chartered, asserts that Bitcoin may experience an immediate price jump of over 4% following a hypothetical Trump victory, subsequently climbing an additional 6% in the days that follow. If the Republicans do manage to secure a clean victory in both chambers of Congress, predictions suggest that Bitcoin’s value could soar to an extraordinary $125,000, representing a minimum 75% increase from its current valuation of approximately $70,000 as of November 1.
According to Kendrick, there are three significant factors that could serve as catalysts for Bitcoin growth in the upcoming months. The foremost catalyst hinges on the prospective repeal of a Securities and Exchange Commission memo referred to as SAB-121, which mandates banks to report crypto assets held in custody as on-balance-sheet liabilities at fair market value. Typically, custodial assets fall into the category of off-balance-sheet holdings. The current treatment of crypto assets presents increased capital and liquidity requirements for banks, thereby stifling their ability to offer custodial services within the crypto space on a larger scale, as highlighted by the American Bankers Association.
Additional catalysts identified include anticipated flows into Bitcoin exchange-traded funds (ETFs) and the likely escalation of inflation, which many experts expect will continue to rise under either presidential candidate. Bitcoin is increasingly viewed by investors as a protective measure against inflationary pressures. Furthermore, Trump has indicated intentions to advocate for the ousting of Gary Gensler, the SEC chair, who has adopted a stricter regulatory stance toward Bitcoin.
Interestingly, Kendrick holds the view that a victory for Kamala Harris may not be detrimental to Bitcoin’s fortunes. He predicts that while an initial dip may occur in Bitcoin prices under such an outcome, the cryptocurrency could stabilize by the year’s end around the $75,000 mark. Various sources have suggested that Harris may also support the departure of Gensler, and Kendrick posits that under her administration, the repeal of SAB-121 is also a possibility.
Setting price targets for Bitcoin is notoriously complex, even for seasoned analysts, considering the inherent volatility of cryptocurrencies. However, Kendrick provides compelling insights based on current market evaluations.
As investors increasingly adopt Bitcoin as a digital counterpart to gold, economic policies pushing for inflation from both Trump and Harris are likely to create a favorable environment for Bitcoin. Irrespective of election outcomes, it appears probable that Gensler’s tenure will conclude and that SAB-121 could be rescinded, although a Republican sweep would likely expedite these changes. Overall, there are growing expectations for Bitcoin to achieve new record highs in the latter part of this year and into next year, with a Republican victory presenting a particularly bullish outlook for the cryptocurrency’s future.
*Stock Advisor returns as of October 28, 2024
Bram Berkowitz has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool recommends Standard Chartered Plc. The Motley Fool has a disclosure policy.
This Cryptocurrency Could Soar 75% by Year End if the Republicans Sweep Congress, According to 1 Wall Street Analyst was originally published by The Motley Fool
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**Interview with Geoff Kendrick, Analyst at Standard Chartered on Bitcoin and the Upcoming U.S. Elections**
**Interviewer:** Geoff, thanks for joining us today. We’ve seen a notable spike in Bitcoin’s value recently, correlating with the upcoming U.S. presidential election. Can you explain what’s driving this interest?
**Geoff Kendrick:** Absolutely, thanks for having me. The surge in Bitcoin’s value, especially the 14% increase we’ve seen over the past month, can largely be attributed to the anticipation surrounding Donald Trump’s potential success in the election. Investors believe that if the Republican Party takes control, they might introduce a more favorable regulatory environment for cryptocurrencies, which could significantly boost Bitcoin’s appeal.
**Interviewer:** So, you’re suggesting that a Republican victory could lead to Bitcoin prices skyrocketing? Could you elaborate on your forecasts?
**Geoff Kendrick:** Yes, that’s right. If Republicans secure both chambers of Congress, we could see Bitcoin rise to $125,000 by year’s end. That’s a minimum increase of about 75% from its current valuation. Historical patterns indicate that regulatory changes often follow political shifts, and many investors are positioning themselves for that.
**Interviewer:** What specific regulatory changes are you anticipating that would benefit Bitcoin?
**Geoff Kendrick:** One key change would be the potential repeal of SAB-121. This memo requires banks to report client-held crypto assets as on-balance-sheet liabilities, making it harder for them to offer custodial services. If that changes, we could see a marked increase in banking participation in the crypto market. Additionally, growing investor interest in Bitcoin ETFs could also catalyze further inflows.
**Interviewer:** Interesting. You’ve also mentioned inflation as a factor. How does that tie into Bitcoin’s attractiveness?
**Geoff Kendrick:** With inflation rising, regardless of the election outcome, Bitcoin is increasingly being viewed as a hedge against inflation, much like gold. If inflation continues, we can expect more investors to turn to Bitcoin as a protective measure for their assets.
**Interviewer:** Now, there’s speculation that if Vice President Kamala Harris were to win, Bitcoin might not fare as poorly as some anticipate. Why is that?
**Geoff Kendrick:** That’s a great question. While I predict an initial dip in Bitcoin prices if Harris wins, I believe it could stabilize around the $75,000 mark by the year’s end. Harris may also support changes that could benefit the crypto market, such as potentially ending Gensler’s lead at the SEC and repealing SAB-121. The outcome might not be as detrimental as some analysts expect.
**Interviewer:** It seems clear that investor sentiment is heavily tied to these upcoming political events. As we look ahead, what’s your overall outlook for Bitcoin through the election period and beyond?
**Geoff Kendrick:** The outlook for Bitcoin is quite bullish, particularly if we see a Republican victory. Expecting new record highs in the latter part of this year and into the next seems plausible, especially as systemic changes in regulation and economic policy create a more favorable environment for cryptocurrencies.
**Interviewer:** Thank you, Geoff, for sharing your insights on this dynamic situation. As we approach Election Day, it’ll be interesting to watch how market responses unfold.
**Geoff Kendrick:** Thank you for having me. It’s definitely a pivotal moment for investors in the cryptocurrency space.
