Standard Chartered’s report says that digital asset prices will continue to be volatile in the short term due to a lack policy clarity by the US government. However, medium-term gains could prove to be significant, according to Standard Chartered.
Geoffrey Kendrick, the bank’s global head of digital assets research, noted in the report that the absence of any mention of digital assets during President Donald Trump’s first day in office was perceived negatively by the market.
In combination with silence, this could prolong price corrections of major coins such as Bitcoin (BTC), and Ethereum (ETH). He also stressed the importance of the institutional inflows which are predicted to increase in the medium-term.
Kendrick wrote:
“We recommend buying the dips in anticipation of medium-term moves higher.”
This report confirmed that Bitcoin will reach $200,000 by 2025 and Ethereum $10,000. Institutional investors are increasing their allocations of crypto exchange traded funds (ETFs).
Kendrick predicted further that pension funds and ETFs would be significant buyers of Bitcoins as well as other crypto currencies, likely driving prices up because they will have a large number. “long-only” nature. He said that only 1% of investors had been exposed to ETFs in crypto.
Market phase
Kendrick described three phases of digital assets for 2025. The first phase, called “when hope dies,”Reflects recent price drops as the optimism of the market wanes. Prices may drop by up to 10%, due to the fading of market optimism and speculation fatigue.
Second phase “buy the dip,”It signals the possible recovery of the economy as the government begins to adopt crypto-friendly policies.
Kendrick wrote:
“We anticipate this may take several weeks or months, given the relative size of the asset class.”
Further, he explained the timeline comparing the size of the digital asset markets to a tech giant such as Apple.
The final phase — “altcoin alpha” — is expected to begin shortly after recovery starts. Kendrick predicted that specific altcoins, such as Litecoin (LTC) and Uniswap’s native token UNI, could benefit from new ETF approvals and regulatory changes, offering investors opportunities for additional returns.
Interest in institutions remains high
Kendrick, despite recent disappointments, remains confident about adoption by institutions. The funds are classified into “pension trusts”Only 1% of Bitcoin ETFs were owned as of September 20,24. This leaves significant room for future growth.
Kendrick, according to
“Fresh capital is likely to flow into these assets, supporting both Bitcoin and Ethereum’s long-term performance.”
Standard Chartered’s analysis highlighted differentiation within the broader crypto market, with sectors like DeFi poised to gain traction due to reduced regulatory compliance burdens. Uniswap is one of the sectors that stands to profit from this change, as it would increase revenue for protocol.
Kendrick concluded, despite the near-term risks of downsides, that this environment offers strategic entry points to long-term investors.
“He added”
“No news is bad news for now, but constructive action from policymakers will drive a robust recovery.”
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