Bitcoin
The bitcoin price is trading at around $62,000 per bitcoin, up almost 50% since the beginning of the year as the market braces for a shock sovereign wealth fund bombshell.
Now, as Elon Musk issues a stark warning over the collapse of the U.S. dollar, former U.S. president Donald Trump and the Federal Reserve could help the bitcoin price rocket to $200,000 per bitcoin by 2025, according to one analyst—giving the cryptocurrency a market capitalization of around $4 trillion.
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Former U.S. president Donald Trump nominated Jerome Powell to the top job at the Federal Reserve ... [+]
"The risk of U.S. fiscal dominance—the monetization of government debt by the Fed—is growing as fiscal dynamics become increasingly unsustainable," Geoff Kendrick, Standard Chartered's head of FX and crypto research, wrote in a note to clients.
"We think such a scenario would be broadly supportive of digital assets as investors seek alternative assets," Kendrick wrote, adding: "We think that a second Trump administration would be broadly positive via a more supportive regulatory environment."
The likelihood of U.S. fiscal dominance with the monetization of government debt by the Federal Reserve is growing, according to Kendrick, something that could contribute to the bitcoin price rocketing to between $150,000 and $200,00 by the end of 2025.
"In a scenario of U.S. fiscal dominance, we think bitcoin would provide a good hedge against de-dollarization and declining confidence in the U.S. Treasury market," Kendrick wrote, adding that a potential Trump victory this year could accelerate the withdrawal of foreign official U.S. Treasury buyers.
Kendrick noted that average annual net selling of U.S. government debt was $207 billion a year in Trump's term versus only $55 billion under current president Joe Biden.
"In addition to the passive boost to bitcoin from de-dollarization, we would expect a second Trump administration to be actively supportive of bitcoin (and digital assets more broadly) via looser regulation and the approval of U.S. spot ETFs," Kendrick wrote.
Despite Trump's hostile attitude toward bitcoin and crypto during his 2017 to 2021 term, he's recently softened his stance, saying in a March interview that "there has been a lot of use of [bitcoin and cryptocurrencies] and I’m not sure I want to take them away at this point." Trump has also used ethereum and other cryptocurrencies to issue what he calls digital trading cards to his supporters.
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The bitcoin price has whipsawed since Donald Trump left the White House, crashing back before ... [+]
Bitcoin and cryptocurrencies are set to play a larger role in this election than they did in either 2016 or 2020. Around 21% of voters in vital U.S. swing states consider crypto policies a topic important enough to sway their support, according to a Harris Poll survey commissioned by the Digital Currency Group (DCG) crypto conglomerate.
Meanwhile, crypto industry super PACs have raised around $100 million for the 2024 congressional elections, according to a report from consumer advocacy group Public Citizen using data from Opensecrets.
