Bitcoin is not a safe haven against geopolitical tensions, says Standard Chartered

Source Cryptopolitan

Bitcoin isn’t going to save us from geopolitical uncertainties. That’s what Geoff Kendrick, Standard Chartered’s global head of digital assets research, believes.

With tensions in the Middle East rising, he expects Bitcoin to fall way below $60,000 before the weekend. But he also believes this could be a prime buying opportunity.

Kendrick points out the connection between geopolitical issues and self-proclaimed pro-crypto Donald Trump’s chances.

This week, his odds of winning the November elections have increased by about 1%, while Kamala Harris’s chances dropped by the same. Trump now sits at 50%, slightly ahead of Harris, who has 49%.

According to Kendrick, there’s a “circularity” in how these tensions affect Bitcoin. When geopolitical risks like the Middle East flare up, Bitcoin drops.

But, oddly enough, these same risks seem to favor Trump’s chances. A Trump victory is considered bullish for Bitcoin, while a Harris win will have the opposite effect.

Trump’s crypto play could change Bitcoin’s fate

Trump’s reappearance on the political stage comes with a twist for the crypto community as he did a complete 180 on the matter.

Analysts expect that a Trump administration would speed up pro-crypto policies, which could send prices flying in the months following the election.

Regulatory advancements could slow down under a Harris administration, ruining market sentiment. But Kendrick believes investors will eventually “buy the dip” when they realize that progress on regulation is inevitable, just delayed.

Despite it all, the market has been seeing a surge in Bitcoin call option positions. Open interest for call options expiring on December 27 with a strike price of $80,000 surged by 1,300 Bitcoin in just two days.

Bitcoin is no gold

While Bitcoin has long been pitched as “digital gold,” Kendrick believes it’s not the safe haven some make it out to be. He said:

“Gold is a geopolitical hedge. Bitcoin is a hedge against traditional finance issues like bank collapses or U.S. Treasury problems.”

When looking at Bitcoin’s price performance from past market cycles, Kendrick says there’s a weird consistency. Despite drastically different conditions, Bitcoin’s behavior is oddly similar across these cycles. 

Analysts debate why this happens, but the fact remains that BTC tends to follow similar patterns, making its dynamics predictable to some extent.

Meanwhile, the percentage of Bitcoin supply held by long-term investors has hit its highest level since mid-2021.

But many of these holders are sitting on unrealized losses. Coins bought near Bitcoin’s all-time high of $73,000 have now crossed the 155-day threshold and are being held at a loss.

Around 47.4% of all Bitcoin in loss right now is held by long-term holders. But the losses aren’t severe enough to cause panic.

Short-term holders, on the other hand, are doing a bit better. Over the past few weeks, short-term holders have seen a slight improvement in profitability.

The percentage of short-term supply in profit has risen to over 62%. Also, profit-taking volumes are 14.17 times higher than loss-taking, showing that investors are cashing out when they can.

This aligns with the idea that while short-term holders are quick to react to market conditions, they’re starting to see better days ahead.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
EURUSD Long-term Forecast: Can ECB Hawks Overcome the Dollar Bullishness? As one of the most traded currency pair in the forex markets, the price of EURUSD affects many traders. Check out our EURUSD long-term forecast for more information.
Author  Mitrade
Mar 13, 2023
As one of the most traded currency pair in the forex markets, the price of EURUSD affects many traders. Check out our EURUSD long-term forecast for more information.
placeholder
Copper Long-term forecast: Will Copper Price Expected To Soar In 2023?The price of copper is affected by various of factors. You may wonder how the price of cooper will be in 2023, check out our forecast analysis.
Author  Mitrade
Mar 13, 2023
The price of copper is affected by various of factors. You may wonder how the price of cooper will be in 2023, check out our forecast analysis.
placeholder
Understanding the first crypto market crash of 2024 and what to expect nextThe 365-day MVRV ratio suggests that this crash may be just the beginning. If the ETF is rejected before the second quarter of 2024, it could trigger a sharp correction.
Author  FXStreet
Jan 04, Thu
The 365-day MVRV ratio suggests that this crash may be just the beginning. If the ETF is rejected before the second quarter of 2024, it could trigger a sharp correction.
placeholder
Natural Gas sinks to pivotal level as China’s demand slumpsNatural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
Author  FXStreet
Jul 01, Mon
Natural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
placeholder
Gold edges higher as geopolitical risks revive following Hezbollah attack in IsraelGold (XAU/USD) edges a third of a percentage point higher on Friday, recovering from the tumble it suffered on the previous day.
Author  FXStreet
Nov 01, Fri
Gold (XAU/USD) edges a third of a percentage point higher on Friday, recovering from the tumble it suffered on the previous day.
goTop
quote