Standard Chartered Calls Bitcoin’s Recent Drop a “Bottom” Amid Geopolitical and Market Shifts

Global investment bank Standard Chartered (SC) has labeled Bitcoin’s recent price decline as the “bottom” of the current crypto winter, citing a combination of geopolitical easing, corporate activity, and ETF dynamics as potential catalysts for a recovery. The bank’s digital asset research head, Jeff Kendrick, highlighted that the cryptocurrency’s drop to $59,000 marked the “coldest period” of the downturn, with the market now poised for a rebound.

Why is Standard Chartered Optimistic About Bitcoin’s Recovery?

According to Kendrick, Bitcoin’s 53% decline from its October 2023 peak of $126,000 suggests the market has reached a “low point” after eight months of corrections. The bank’s analysis points to several factors that could drive a recovery, including the potential for U.S.-Iran peace talks and the stabilization of oil prices. “If geopolitical tensions ease, it could reduce risk-off sentiment and boost demand for assets like Bitcoin,” Kendrick said in a report published on May 12.

The G7 summit, scheduled for late May, has drawn attention as a potential turning point. Analysts note that a U.S.-Iran agreement could stabilize Brent crude prices around $86 per barrel, easing inflationary pressures and improving investor confidence in risk assets. This, in turn, could reduce the downward pressure on Bitcoin, which has historically shown sensitivity to macroeconomic shifts.

How Will the SpaceX IPO Impact Bitcoin’s Price?

Standard Chartered also flagged the upcoming SpaceX IPO as a key variable. The private space company’s $17.5 billion valuation has sparked speculation that some investors may sell Bitcoin ETFs to fund participation in the offering. “There’s a possibility that liquidity pressures from the IPO could temporarily weigh on Bitcoin,” Kendrick noted. However, the bank added that this could create a “buying opportunity” once the offering concludes and funds flow back into crypto markets.

Data from the decentralized derivatives platform Hyperliquid shows that open interest in SpaceX-related futures contracts surpassed $2.4 billion, with 24-hour trading volumes exceeding $2.2 billion. These figures underscore the market’s heightened focus on the event, though their direct impact on Bitcoin remains speculative.

What Role Do ETFs and Institutional Buying Play?

Despite the potential short-term headwinds, Standard Chartered emphasized the importance of institutional demand. The bank pointed to a $50 billion net outflow from Bitcoin ETFs since mid-May as a critical challenge. “If this trend continues, it could limit Bitcoin’s recovery,” Kendrick said. However, he also noted that corporate purchases of Bitcoin, such as those by Stratis, could offset some of this pressure.

As of May 13, Bitcoin was trading at $63,681, a 4.7% increase from the previous week, according to CoinMarketCap. While this represents a modest rebound, the broader crypto market saw only a marginal rise in total market cap, highlighting the asset’s continued vulnerability to macroeconomic shifts.

What’s Next for Bitcoin’s Long-Term Outlook?

Standard Chartered maintained its long-term target of $100,000 for Bitcoin, despite short-term volatility. The bank’s report stressed that “long-term fundamentals remain intact,” with growing adoption and technological advancements underpinning the cryptocurrency’s value proposition. However, it cautioned that the market’s recovery would depend on a confluence of factors, including sustained oil price stability and renewed institutional inflows.

For now, investors are closely monitoring geopolitical developments and corporate activity. As Kendrick concluded, “The path to a sustained recovery isn’t guaranteed, but the current low point offers a strategic entry opportunity for those with a long-term horizon.”