- Bitcoin price is expected to drop further to around $88,700 before rallying again, according to Standard Chartered’s digital assets researcher Geoff Kendrick.
- The recent decline in Bitcoin’s price was likely catalyzed by the anticipated appointment of Scott Bessent as the new U.S. Treasury Secretary, which led to a rally in U.S. Treasuries and a drop in yields.
- Despite the short-term drop, Kendrick predicts that Bitcoin could reach $125,000 by the end of 2024 and $200,000 by the end of 2025.
Bitcoin recently came close to surpassing $100,000 but has since dropped below $94,000. According to British multinational bank Standard Chartered, the price still has room to fall further.
Reasons for the Drop
Geoff Kendrick, Standard Chartered’s digital assets researcher, wrote Tuesday that more pain is to come and bitcoin will drop to as low as $88,700. The reason? The new Treasury secretary.
Kendrick believes the catalyst for bitcoin’s decline was the announcement that Scott Bessent would be the new US Treasury secretary. Bessent is considered fiscally conservative, which could mean more sensible monetary policy. This led to a rally in US Treasuries, with yields dropping over 10 basis points.
Short Term Outlook
In the short term, Kendrick said bitcoin’s rally could slow because it is often used to hedge against traditional finance issues related to banking or Treasuries. With US Treasuries rallying, investors seem happy with traditional markets for now.
Bitcoin is typically seen as a hedge against bad monetary policy and inflation. But with Treasuries doing well, investors don’t feel the need to flock to bitcoin at the moment.
Previous Highs
Bitcoin went on a wild run after Donald Trump‘s election victory on November 5, hitting a new all-time high of $99,645 last week. This was a stark contrast to bitcoin trading below $70,000 on election night.
Investors became bullish as Trump promised deregulation, tax cuts, and support for the crypto industry. But bitcoin stopped short of $100,000 and then dropped fast this week.
Long Term Potential
Despite the recent drop, Kendrick still sees potential in the long run. He predicted bitcoin could hit $125,000 by the end of 2024 and $200,000 by the end of 2025. The $100,000 milestone is still very possible in his view.
Conclusion
While bitcoin has retreated from its highs, analysts still expect robust growth ahead. There may be some bumps along the way, but the long-term trajectory looks bright. Patient investors could still see massive gains if they can stomach the volatility.
