In the ever-evolving realm of digital currencies, market shifts often present opportunities for strategic investments. As geopolitical tensions intensify, particularly in the Middle East, Bitcoin (BTC) could see a significant dip below the $60,000 mark. According to Geoff Kendrick, the global head of digital assets research at Standard Chartered, such a downturn might just be the perfect moment for investors to accumulate more Bitcoin.
Understanding Bitcoin’s Price Dip
The escalating tensions between Iran and Israel have driven investors towards safer assets like gold, potentially creating a temporary bearish trend for Bitcoin. Kendrick highlights that this potential pullback in Bitcoin’s value could serve as a lucrative opportunity for savvy investors to increase their holdings.
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In a recent note, Kendrick expressed that the geopolitical risks stemming from the Middle East are likely to push Bitcoin’s price below $60,000. Despite this anticipated dip, he remains optimistic, citing the strategic positions like $80,000 call options and the interconnections with political probabilities surrounding Donald Trump as indicators that investors should consider buying into this dip.
Market Indicators and Trader Sentiments
Kendrick also pointed out a notable increase in call option open interest on Deribit, with a surge of 1,300 BTC in the past two days for December 27 expiry contracts at an $80,000 strike price. This uptick suggests that traders are anticipating a potential rally in BTC by the year’s end, indicating a positive outlook for Bitcoin in the market.
While Bitcoin has yet to establish itself as a robust hedge against geopolitical uncertainties, it continues to be viewed as a safeguard against traditional financial system disruptions, such as bank collapses or a decline in the dollar’s dominance.
The Political Landscape: Trump Versus Harris
Kendrick also explored the implications of the Middle Eastern geopolitical scenario on the upcoming US presidential election. He noted that the Iranian offensive against Israel might have subtly shifted the political odds in favor of Donald Trump against Kamala Harris. Data from Polymarket supports this claim, showing Trump’s chances of winning at 50% compared to Harris’ 49%.
According to Kendrick, this creates an interesting dynamic for Bitcoin. While the immediate impact of geopolitical tensions might be negative for BTC, the potential political shift towards a Trump victory could bolster the digital asset’s outlook post-election. Trump is generally seen as a pro-crypto candidate, having demonstrated his support through actions like using Bitcoin for purchases.
Crypto Community’s Reception of Political Candidates
In contrast, the crypto community has been somewhat skeptical of Kamala Harris. The Biden administration’s approach to the crypto industry has faced criticism, leading many crypto businesses to relocate to more favorable jurisdictions like Singapore and the UAE. Nevertheless, Harris has recently expressed a commitment to fostering a more favorable regulatory environment for emerging technologies, including digital assets, which has sparked some optimism within the crypto community.
Interestingly, crypto trading firm QCP Capital suggested that a Harris win might not be as detrimental to the crypto market as some investors fear. At the time of writing, Bitcoin is trading at $60,090, having experienced a 5.7% decline in the past 24 hours.
