In an October 24 research paper, Geoff Kendrick, global director of digital asset research at Standard Chartered Bank, predicted that Bitcoin could surge to $125,000 by the end of the year if former President Donald Trump secures victory in the upcoming US presidential election.

When Bitcoin Could Hit $125,000

Kendrick analysis is based on the interplay of Bitcoin price movements and the US political landscape. “We use daily BTC volume levels and popular strike levels to estimate post-election price movements,” states the report titled Bitcoin – Post-US Election Playbook. According to Kendrick, Bitcoin prices have been rising in recent weeks, matching other trades favored by Trump supporters.

The report predicts that Bitcoin’s price will likely reach around $73,000 by Election Day on November 5, approaching the all-time high of $73,800 recorded in March. “Our base case is that Bitcoin will rise to around $73,000 by Election Day, matching the probability of Trump winning in the betting market,” Kendrick notes.

Betting markets reflect growing confidence in Trump’s victory. “According to RealClearPolitics, the average odds for Trump to win are currently 59%. “Moreover, conditional probabilities in specific betting markets (Polymarket) suggest a 75% chance of a Republican win if Trump wins the presidency,” the report highlights.

If Trump wins, Kendrick predicts an immediate rise in Bitcoin’s price. “Assuming a Trump victory, the options breakeven means prices will continue to rise by about 4% once the presidential election result is known, and by a total of about 10% over the next few days,” he explains.

The potential for Republicans in Congress reinforces this perspective. “If Republicans win Congress, our year-end target of $125,000 should be there,” Kendrick says. This scenario is based on significant open interest in Bitcoin call options expiring on December 27 at a strike price of $80,000, suggesting a rapid move towards this level.

What if Harris wins?

In contrast, if Vice President Kamala Harris wins, the report suggests a transient deterioration in Bitcoin prices. “If Harris wins, BTC prices will be lower initially, but 2024 will still see new highs around $75,000,” Kendrick predicts. This means stable long-term prospects for Bitcoin regardless of the election outcome, although the scale of gains would be different.

Kendrick emphasizes the role of options market data in assessing potential price movements. “Options information helps estimate initial price movements after an election,” he states. High trading volumes and popular strike levels serve as indicators of investor expectations and market positioning ahead of the election.

The recent drop in the price of Bitcoin to a local low of $65,200 was also discussed. Kendrick believes that “this will likely be the last election before the US presidential election,” suggesting that any short-term corrections could be overshadowed by upcoming political developments.

At the time of publication, the price of BTC was $67,520.

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