Standard Chartered: Bitcoin has 12% room to rise before the US election

Bitcoin bulls have been waiting for another all-time high for over six months. Standard Chartered said this may finally arrive within the next few weeks.

In a new study, Geoff Kendrick, head of digital asset research at Standard Chartered Bank, estimates that before the November US presidential election, Bitcoin could reach $73,800, up 12% from current levels.

To support this, Kendrick cites the Bitcoin and MicroStrategy (MicroStrategy) stock multiples (share multiples = total assets ÷ total share capital of common shares). MicroStrategy is famous for hoarding large amounts of Bitcoin, and its reserves recently reached 252,000 units.

As shown in the chart below, after trading relatively synchronously with the Bitcoin price (green line) throughout 2024, the MicroStrategy stock multiplier (blue line) has exploded. Kendrick said that two fundamental factors contributing to this premium are likely to drive Bitcoin higher, and the gap between the two will narrow over time.

The first factor is news last month that Bank of New York Mellon (BNY Mellon) was exempted from Employee Accounting Notice No. 121 (SAB 121), an unpopular piece of legislation that forces traders to list their cryptocurrency holdings on their balance sheets. Deregulation, on the other hand, is generally viewed as a favorable factor for Bitcoin.

Second, the exemption from Employee Accounting Notice No. 121 is closely related to MicroStrategy's announcement of plans to become a “Bitcoin Bank,” which will provide Bitcoin capital market tools in the future. Kendrick anticipates that future exemptions may allow the company to earn revenue by lending Bitcoin.

“For me, the link between the two is that as the broader digital asset ecosystem becomes more legal/accessible, the MicroStrategy stock multiplier will rise,” Kendrick said.

According to Kendrick, the US election results are secondary to these bullish forces, although both Trump and Harris wins bode well for the cryptocurrency industry.

He wrote, “As the US election approaches... the broader digital asset ecosystem is indeed increasingly likely to become mainstream.”

Kendrick previously stated that both presidential candidates would boost cryptocurrencies in the long run, but Trump's victory would be the more favorable of the two. If the Republican candidate returns to the White House, Kendrick estimates that the price of Bitcoin could soar to $125,000 by the end of 2024.