Bitcoin Could Benefit From U.S. Fiscal Dominance and a Trump Win, Standard Chartered Says

As a crypto investor with experience in navigating market trends and economic conditions, I find the latest report from Standard Chartered to be quite intriguing. The growing risk of U.S. fiscal dominance and potential monetization of government debt by the Federal Reserve is a significant concern for many investors, myself included. This situation could lead to a search for alternative assets like cryptocurrencies that offer potential protection against de-dollarization and declining confidence in traditional markets.

As a crypto investor, I’m keeping a close eye on the increasing risk of U.S. fiscal dominance and the potential monetization of government debt by the Federal Reserve. According to a research report published by Standard Chartered Bank on Tuesday, such a scenario could prove beneficial for cryptocurrencies as investors look for alternative assets to protect their portfolios from potential inflationary pressures.

Expert: The dominance of U.S. fiscal policy is expected to result in several impacts on the U.S. Treasury yield curve. Kendrick explained that this situation would likely lead to a steeper slope between the 2-year and 10-year yields, a more pronounced rise in inflation-adjusted yields (breakevens) compared to real yields, and an upward shift in term premiums. Additionally, he noted that the price of bitcoin tends to move in tandem with these three developments.

If Trump were to be re-elected as president, his second administration could expedite the decrease of foreign official buyers of U.S. Treasuries due to fiscal concerns, according to the bank’s analysis. During his initial term, the average annual net selling of U.S. government debt amounted to $207 billion. In contrast, under President Biden’s tenure, only $55 billion in net selling occurred on an annual basis.

The report states that a second term for Trump could bring an additional advantage to Bitcoin through his administration’s active support, which may include less regulation and approval of U.S. spot Bitcoin Exchange Traded Funds (ETFs). Standard Chartered maintains its prediction that Bitcoin will reach $150,000 by the end of this year and $200,000 by 2025.