BofA warns Fed risks policy mistake with early rate cuts
On Thursday, Standard Chartered (OTC:SCBFF) projected that Bitcoin could potentially reach a high of $130,000 in the next two months, bolstered by increasing institutional investment.
Geoff Kendrick, the head of forex and digital assets research at Standard Chartered, attributed this optimistic forecast to a period of relative market stability following the Federal Reserve’s recent decision to maintain current interest rates. With the next policy decision on March 19, Kendrick suggested the Fed’s current stance diminishes immediate market uncertainty.
Kendrick identified the Securities and Exchange Commission’s (SEC) recent withdrawal of the cryptocurrency accounting guidance SAB 121 as a pivotal factor that could drive institutional funds into Bitcoin. This policy change facilitates traditional financial institutions in holding digital assets, which Kendrick believes will accelerate institutional inflows. He anticipates that Bitcoin will challenge its previous all-time high of $109,000 soon and could rise to between $112,000 and $130,000 in February and March.
The recent market volatility, which saw a sell-off on Monday due to news of DeepSeek’s cost-effective AI model, resulted in the liquidation of $1.1 billion in long Bitcoin positions across futures exchanges. Kendrick noted that this has led to a healthier market with less leverage. He also mentioned that AI-facilitated technological deflation could support Bitcoin prices, as lower inflation could benefit risk assets unrelated to AI, with assets directly linked to AI adoption potentially seeing even greater gains.
Additionally, Kendrick discussed the potential impact of the Trump administration’s executive order aimed at positioning the U.S. as a leader in the crypto sector. Although the order has introduced some market uncertainty due to its ambiguous language, Kendrick believes the market is moving beyond the initial reaction and sees the current phase as an opportunity to "buy the dip."
The Standard Chartered analyst’s comments come at a time when the crypto market is navigating through both regulatory changes and macroeconomic factors, with the potential for significant institutional participation shaping the outlook for Bitcoin’s price trajectory.
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