According to Geoff Kendrick, the global head of digital asset research at Standard Chartered, Bitcoin’s (BTC) drop below $60,000 due to escalating geopolitical tensions in the Middle East could provide an excellent buying opportunity.
Bitcoin under $60,000, a buying opportunity?
As tensions between Iran and Israel rise, risky assets like Bitcoin could face a decline while investors flock to safer investments such as gold. However, Kendrick suggests that the potential pullback in digital assets like BTC could be an opportunity for accumulation.
In a recently shared note, Kendrick noted:
Risk concerns regarding the Middle East appear destined to push Bitcoin below $60,000 before the weekend, but positions like the $80,000 calls highlighted here and the circularity versus Trump odds suggest the dip should be redeemed.
Kendrick also noted an increase in open interest on call options on Deribit, with an increase of 1,300 BTC in the past two days for contracts expiring on December 27 at a strike price of $80,000. This indicates that more traders are betting on a year-end rally for BTC, painting a positive market outlook for the leading cryptocurrency.
The analyst made it clear that BTC has not yet proven itself as a hedge against geopolitical tensions, and that gold still dominates in times of global uncertainties. However, Bitcoin is a hedge against traditional financial downturns (TradFi), such as bank collapses or dedollarization.
A Donald Trump victory is seen as bullish for digital assets
Kendrick drew attention to the possible impact of the recent Iranian offensive against Israel on the upcoming US presidential elections. He said the development has tilted the odds somewhat in Trump’s favor against Kamala Harris. This can be verified via facts on Polymarket, which puts Trump’s chances of emerging victorious at 50%, compared to Harris’s 49%.
Kendrick called it an “interesting circularity for Bitcoin” and explained that while geopolitical tensions could drive down the BTC price in the short term, they increase Trump’s chances of winning, improving the prospects for the digital asset post-election improve.
Trump is widely seen as a pro-crypto candidate. Recently he was spotted buying burgers at a bar in New York City, where he paid with Bitcoin.
Kamala Harris, the Democratic presidential candidate, on the other hand, does viewed with some skepticism from the crypto community. The Biden administration has been criticized for its alleged crackdown on the crypto industry, which has prompted many crypto companies to relocate to more crypto-friendly countries like Singapore and the UAE.
That said, Harris’ recent statements about cryptocurrencies have led to some optimism. Her, for example promised invest in America’s competitiveness by promoting a more favorable regulatory environment for emerging technologies, including digital assets.
This includes crypto trading firm QCP Capital noted that a win for Harris may not be as bearish as some crypto investors may fear. BTC is trading at $60,090 at the time of writing, down 5.7% in the last 24 hours.
Featured image from Unsplash.com, chart from TradingView.com