Crypto's "March 2023 Moment"
Geoffrey Kendrick of Standard Chartered (STAN) says crypto is going through the same setup as March 2023 and expects Bitcoin (BTC) to reach at least 100K by end of year. This is the guidance Standard Chartered gives its nearly 400 billion in wealth and retail banking clients.
In March 2023, Silicon Valley Bank and a few other US regional banks failed over a weekend. Bitcoin was at 25,000 at the time. A week later Kendrick called for 100K by the end of 2024, which happened. Today Bitcoin sits around 70,000-plus, up from the mid-to-low 60s a few days earlier.
Two Market Events This Week
First: Treasury Secretary Scott Bessent is considering using the Treasury's nearly 1 trillion Treasury General Account to do bond buybacks. That would push a large wave of liquidity into markets. The US Treasury has signaled it will provide liquidity assistance at least twice as large as before.
Second: On Friday, August 28, at 10 a.m. Eastern, Fed Chair Kevin Warsh delivers his Jackson Hole keynote, his first as Fed chair. Markets will watch every word, and volatility is expected.
The Rate Call
Jeremy Siegel, professor emeritus of finance at the University of Pennsylvania's Wharton School and chief economist at WisdomTree (WT), told CNBC that Warsh will not raise interest rates before the midterms. He expects a big rally Friday if Warsh does what he thinks.
Siegel does not like the "Bessent twist." He does not think markets were unruly or needed extra liquidity. He notes the 10-year yield has been at 4 and 3/4 before and calls that no choke point; 40 or 30 years ago such rates would have looked low. He says the market does not need forward guidance but wants the Fed to reveal what criteria it watches - five-year inflation expectations, the Fed funds futures market. He calls that the right function of the Fed, and if Warsh does it, a big rally could follow Friday.
He expects Wednesday's PCE inflation report to come in at or even below expectation, so little pressure to raise. Politically, he does not see rate hikes.
Why This Matters for Bitcoin
Bitcoin exists to store wealth in a system with no central authority. Stories about Treasury moves, bank failures, or Fed independence are the kind that Bitcoin gains from. These signals mark the turn back toward "crypto summer," with the cycle low behind us.
The Short Squeeze and Inflows
Most positioning through the summer had been short. This week produced the largest short squeeze on record over the roughly five years of data on Coinglass, with about 4 billion of shorts liquidated. Bitcoin jumped 15,000 dollars in a couple of days, and this happened before traders even went long.
ETF inflows have returned, with 1.5 billion this week. Expect a single day of more than a billion dollars of inflow, based on the pattern seen after past jumps. Kendrick expects Bitcoin at 80-something over today, tomorrow, and the weekend, then on to 100K by year-end.
The 500K by 2030 Case
Standard Chartered believes Bitcoin reaches 500K by 2030. The drawdown cycle has ended. Bitcoin tends to move in four-year cycles; the all-time high was 126,000 last October. Cycle theory says a roughly 12-month decline then recovery, and the recovery started a bit early this time.
The medium-term case compares Bitcoin to gold in a two-asset portfolio. Given gold's strong run over the last couple of years, the market is now structurally underweight Bitcoin. As Bitcoin's volatility keeps falling, more institutional investors buy, and they remain structurally under-allocated. In a small asset class, that flow can push the price to 500,000 by the end of 2030 - just over four years out. Gold is showing Bitcoin's future, and many remain under-allocated to Bitcoin compared with gold.
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