Bitcoin Receives Bullish View from Standard Chartered April 30, 2023 April 30, 2023 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Bitcoin NewsApril 30, 2023 by Kelly Cromley

Bitcoin Receives Bullish View from Standard Chartered

The bond and stock markets are tense due to the unresolved debt ceiling crisis. On the other hand, if a historic default occurs, Bitcoin has the potential to increase in value, although some investors may fear it. According to Geoff Kendrick, who is the director of FX research at Standard Chartered, a US default is an event that has a high impact but low probability. He also forecasted that such an event could result in a $20,000 increase in the price of bitcoin, which is equivalent to a 68% rise from its current level.

The top cryptocurrency by market capitalization is known for its ability to perform well during difficult times and is often considered a safe haven due to its decentralized nature, according to his explanation. Kendrick’s opinion is that if the US defaults, bitcoin’s value would not increase in a linear manner. He believes that there may be a slight decrease in its value on the first, second, or subsequent days. He predicted that if such a situation were to occur, the value of bitcoin would first drop by $5,000 and then rise by $25,000.

He stated that not all cryptocurrencies would exhibit the same behavior as bitcoin. For instance, ethereum might trade similarly to equities and could potentially decrease in a default. Hence, the ideal trade would probably involve taking a long position on bitcoin and a short position on ethereum. Kendrick stated that this combination would probably be a reasonable representation.

A default could happen in the summer if Congress doesn’t increase the federal debt ceiling of $31.4 trillion, potentially causing global market tremors. On Tuesday, Janet Yellen, the Treasury Secretary, cautioned that a default would have catastrophic consequences for the US economy, leading to widespread job loss, payment defaults, and permanently elevated interest rates.

Yields on three-month Treasurys have reached their highest level in 22 years due to the disagreement between House Republicans and the White House on raising the debt ceiling. This is because the Treasurys are maturing close to a potential default date.

Bitcoin is currently in the process of recovering from a significant sell-off that started in late 2021 and continued throughout most of 2022 due to the Federal Reserve’s implementation of a rigorous tightening cycle. Bitcoin’s value has surged by almost 80% in 2023 and has come close to reaching $30,000 due to renewed financial sector concerns sparked by First Republic Bank’s issues.

In a note on Monday, Kendrick expressed optimism about bitcoin, predicting that it could reach $100,000 by the end of 2024. This was attributed to various factors such as bank instability, the halving of the bitcoin supply, and the anticipated cessation of Fed rate hikes. However, there was no mention of the potential danger of a US default. He wrote that although there are still sources of uncertainty, they believe that the path to USD 100,000 is becoming clearer.

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.