Standard Chartered's global head of digital assets research has highlighted a number of factors that could support bitcoin's price in the coming months.
Kendrick said that since the U.S. Federal Reserve cut the fed funds rate last week, for U.S. Treasury notes, long-term borrowing costs are relatively higher than short-term borrowing, which often indicates optimism about future economic growth and contributes to a favorable environment for investments, including bitcoin.
"There are a number of drivers to watch to indicate a topside breakout in bitcoin," Kendrick noted in an email to The Block. "After the U.S. Federal Reserve cut rates, it was the turn of a steeper yield curve helping, and this has continued this week too, with 2-year and 10-year U.S. Treasury notes now around plus 21 basis points."
The global head of digital assets research at Standard Chartered also pointed to developments in the derivatives market to support his optimistic outlook for bitcoin. "This week, we have started to see new topside bitcoin calls being added for the 27 December options expiry. This interest has been building mostly around the round strike price figure of $100,000" Kendrick added.
The Standard Chartered analyst said the increase in open interest surrounding top-side bitcoin options has accelerated at a rate that cannot be solely attributed to the approximately 6% rise in the digital asset's price over the past week. Kendrick explained that the notable growth in open interest at the $100,000 strike price suggests that other factors are influencing derivatives traders' decisions.
According to Kendrick, Vice President Kamala Harris' recent remarks at a fundraising event in New York are a key new factor influencing the market. On Sunday, she expressed her commitment to supporting emerging technologies, including artificial intelligence and digital assets, emphasizing her intention to encourage innovation while also ensuring the protection of consumers and investors.
"The most likely new factor, from a timing perspective, is Vice President Harris’ comments on Sunday, September 22, where she said she would encourage crypto businesses. These comments suggest either outcome on 5 November will end up being bitcoin positive," he added.
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