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Standard Chartered Head of Digital Assets Research Geoffrey Kendrick has weighed in on the catalyst for Bitcoin’s recent decoupling from stocks.
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Kendrick said the catalyst for Bitcoin’s current run could send it to fresh all-time highs.
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Bitcoin is now trading at a key level.
Despite the persisting narrative that Bitcoin is an asset with the potential to become a store of value on par with gold, if not better, the asset has, for the most part, traded in tandem with tech stocks, failing to hold up in the face of market uncertainty.
And until recently, things looked no different in the current cycle. Amid President Donald Trump‘s controversial tariff policies and inflation concerns over the past few months, Bitcoin followed the Nasdaq and S&P 500 in a significant retreat from record highs. But this week, there has been a marked shift in this correlation despite no apparent change in market conditions.
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On Monday, Bitcoin jumped nearly 3% from around $85,000 to highs above $88,000, while traditional equities continued their slump, with the Nasdaq and the S&P 500 dropping about 2%. Is Bitcoin finally taking its place in the pantheon of safe-haven assets?
In a Tuesday note, Standard Chartered Head of Digital Assets Research Geoffrey Kendrick said that Bitcoin traded like a tech stock except in times of risk to the legacy financial system. In these instances, Kendrick asserted that the asset acted as a hedge, citing its price action during the banking crisis that led to the collapse of several banks in Q1 2023.
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Kendrick opined that in the case of Bitcoin’s most recent rally, investors were reacting to risks to the financial system associated with the government amid the growing threat to the Federal Reserve’s independence under the Trump administration.
In recent weeks, Trump has openly tried to twist the arm of Fed Chair Jerome Powell to cut interest rates using personal attacks on social media.
“There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump wrote, referring to Powell in a Monday Truth Social post, asserting that “there is virtually No Inflation.”