A Standard Chartered report warns that the growing risk of U.S. fiscal dominance due to the Federal Reserveโs potential debt monetization could drive investors to cryptocurrencies.
In this context, a second term under former President Donald Trump might benefit digital assets.
โWe think that a second Trump administration would be broadly positive via a more supportive regulatory environment,โ the report said.
Standard Chartered analyst Geoff Kendrick emphasized that Bitcoin could offer a valuable hedge against de-dollarization and waning confidence in U.S. Treasuries.
โA steeper nominal 2-year/10-year curve, a greater increase in breakevens than real yields, and an increase in term premium are three probable consequences of U.S. fiscal dominance on the Treasury curve,โ Kendrick added, highlighting Bitcoinโs (BTC) positive correlation with these developments.
The report noted that Trumpโs previous term saw an average annual net selling of U.S. government debt totaling $207 billion, versus $55 billion under President Biden.
Aside from the passive benefit to Bitcoin due to de-dollarization, Standard Chartered expects a second Trump administration to promote Bitcoin and digital assets through relaxed regulations and the approval of U.S. spot ETFs.
Earlier this year, Trump spoke with CNBC about cryptocurrency, showing openness to the sector and noting that he wouldnโt want to take it away. Despite not owning any Bitcoin, the former President said he recognized its increasing popularity.
Standard Chartered reiterated its projections for Bitcoinโs value, forecasting a year-end price of $150,000 and up to $200,000 by the end of 2025.
