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In a research paper dated October 24, Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered Bank, predicts that Bitcoin could rise to $125,000 by the end of the year if former President Donald Trump secures victory in the upcoming US presidential election.
When Bitcoin Could Hit $125,000
Kendrick’s analysis hinges on the interaction between Bitcoin price movements and the US political climate. “We use daily BTC volume levels and popular strike levels to estimate post-election price movements,” he said in a report titled Bitcoin – Post-US Election Playbook. According to Kendrick, Bitcoin prices have been rising in recent weeks, in line with other trades favored by Trump supporters.
The report predicts that Bitcoin is likely to reach around $73,000 on Election Day on November 5, approaching the all-time high of $73,800 recorded in March. “Our base story is that Bitcoin rises to around $73,000 on Election Day, reaching the market’s betting odds of a Trump win,” Kendrick noted.
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Betting markets are showing growing confidence in Trump’s victory. “The average betting odds of a Trump victory now stand at 59%, according to RealClearPolitics. In addition, conditional probabilities in certain betting markets (Polymarket) suggest a 75% probability of a Republican sweep if Trump wins the presidency,” the report highlights.
Should Trump win, Kendrick expects an immediate boost for Bitcoin. “If we assume a Trump victory, the options divergence means an additional price increase of about 4% when the presidential result is known, and about 10% in total within a few days,” he explained.
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The possibility of a Republican sweep of Congress amplifies this view. “If the Republicans sweep Congress, our year-end target of USD 125,000 should be realized,” Kendrick said. The situation is supported by significant open interest in Bitcoin call options expiring on December 27 at the $80,000 strike price, suggesting a quick move to that level.
What If Harris Wins?
Conversely, if Vice President Kamala Harris emerges victorious, the report suggests a temporary reversal of Bitcoin prices. “If Harris wins, we see BTC initially trading lower but continuing to end 2024 with highs of around $75,000,” Kendrick projects. This means a strong long-term outlook for Bitcoin regardless of the outcome of the election, although the magnitude of the gains may vary.
Kendrick emphasizes the role of options market data in estimating potential price movements. “Options information helps measure post-election price movements,” he says. Heavy trading volume and popular strike rates serve as indicators of investor expectations and market conditions ahead of the election.
The recent dip in Bitcoin price to a low of $65,200 has also been addressed. Kendrick believes this “may be the last one before the US presidential election,” suggesting that any short-term fixes could overshadow upcoming political developments.
At press time, BTC traded at $67,520.
The featured image was created with DALL.E, a chart from TradingView.com
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