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In an October 24 research paper, 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 Reach $125,000
Kendricks analysis depends on the interplay between Bitcoin price movements and the US political landscape. “We use daily BTC volume levels and popular strike levels to estimate post-election price movements,” he says in the report titled Bitcoin – Post-US Election Playbook. According to Kendrick, Bitcoin prices have risen in recent weeks, in line with other trades favored by Trump supporters.
The report predicts that Bitcoin will likely reach around $73,000 on Election Day on November 5, nearing its all-time high of $73,800 in March. “Our base case is that Bitcoin will rise to around $73,000 on Election Day, overtaking the odds for a Trump victory in the gambling market,” Kendrick notes.
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The betting markets reflect increasing confidence in a Trump victory. “According to RealClearPolitics, the average odds on Trump winning are now 59%. Furthermore, conditional odds on specific betting markets (Polymarket) suggest a 75% chance of a Republican victory if Trump wins the presidency,” the report points out.
Should Trump win, Kendrick expects immediate bullish momentum for Bitcoin. “Assuming a Trump victory, option breakeven implies a further price increase of about 4% when the presidential outcome is known, and about 10% in total within a few days,” he explains.
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The potential for a Republican movement in Congress reinforces this view. “If Republicans win Congress, our final goal of $125,000 should be in sight,” Kendrick said. This scenario is supported by significant open interest in Bitcoin call options expiring on December 27 at the $80,000 strike price, indicating rapid movement toward that level.
What if Harris wins?
On the other hand, if Vice President Kamala Harris emerges victorious, the report suggests a temporary pullback for Bitcoin prices. “If Harris wins, we see BTC trading lower initially but still ending at new highs around $75,000 in 2024,” Kendrick projects. This implies a resilient long-term outlook for Bitcoin regardless of the election outcome, although the magnitude of gains would differ.
Kendrick emphasizes the role of options market data in measuring potential price movements. “Option information helps estimate initial price movements after the election,” he says. The high trading volumes and popular strike levels serve as indicators of investor expectations and market positioning ahead of the election.
The recent drop in Bitcoin’s price to a local low of $65,200 was also addressed. Kendrick believes this will “probably be the last one before the US presidential election,” suggesting any short-term corrections could be overshadowed by looming political developments.
At the time of writing, BTC was trading at $67,520.
Featured image created with DALL.E, chart from TradingView.com
