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In summary
- Bitcoin almost reached $100,000, but is now trading below $94,000, affected by factors such as Bessent’s announcement as Treasury Secretary.
- Standard Chartered researcher Geoff Kendrick predicted that Bitcoin could fall to $88,700 due to changes in US tax policy.
- Despite the drop, Kendrick expects Bitcoin to recover in the long term, reaching $125,000 by the end of the year and $200,000 by 2025.
Bitcoin was so close to breaking six figures, but is now trading below $94,000 after closing last week near the magical $100,000 mark.
And it still has room to fall further, according to the British multinational bank Standard Chartered.
The firm’s digital asset researcher Geoff Kendrick wrote on Tuesday that more difficulties are coming and the largest coin will fall to $88,700. The reason? The new Secretary of the Treasury.
“I believe yesterday’s catalyst (for Bitcoin’s price drop) was Bessent’s announcement (to the Treasury) of reduction in the US Treasury bond premium,” he wrote. US Treasuries have risen with Donald Trump’s selection of Scott Bessent as US Treasury Secretary, with yields falling more than 10 basis points over five to thirty years.
Kendrick added that in the short term, Bitcoin’s rise could slow because “one of its main uses is to protect against (traditional financial) problems (related to the banking sector or the Treasury).”
Hedge fund manager Bessent is considered a fiscal conservative by Wall Street, which could mean more sensible monetary policy, especially when it comes to tariffs. President-elect Donald Trump had promised an aggressive policy of tariffs, or taxes on imports. US Treasuries had retreated as tariffs often lead to higher inflation, according to economists.
However, many market analysts expect Bessent to moderate Trump’s policy, which would lead to a rally in Treasuries.
The largest digital asset by market capitalization is often seen as a haven against poor government monetary policy and inflation. But with U.S. Treasuries rising, investors, at least for now, are taking a favorable view of what they see in traditional financial markets.
Bitcoin was on a wild ride after Donald Trump’s surprise election victory on November 5, hitting a new all-time high of $99,645 last week. This contrasts with BTC price trading below $70,000 on election night, before it was clear that Trump would win.
The former Republican President won the popular vote and took all the key states. Now, investors are optimistic: The real estate mogul has promised deregulation, tax cuts and helping the Cryptocurrency industry.
For now, Bitcoin fell short of reaching $100,000 and has fallen rapidly this week.
Still, Kendrick said it will continue to rise in the long term. He predicted that Bitcoin would reach $125,000 by the end of the year and $200,000 by the end of 2025.
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