tl;dr
Standard Chartered predicts that despite short-term volatility in digital asset prices due to policy uncertainty, rising institutional inflows will drive a medium-term market recovery. The report by Geoffrey Kendrick, the bank's global head of digital assets research, suggests buying the dips in ant...
Standard Chartered Report on Crypto Market Recovery Standard Chartered report suggests rising institutional inflows will drive crypto market recovery amid policy uncertainty.
Standard Chartered predicts that despite short-term volatility in digital asset prices due to policy uncertainty, rising institutional inflows will drive a medium-term market recovery. The report by Geoffrey Kendrick, the bank's global head of digital assets research, suggests buying the dips in anticipation of future gains.
Bitcoin and Ethereum are projected to reach $200,000 and $10,000 respectively by 2025, propelled by increased institutional investment in crypto-related exchange-traded funds. Kendrick outlines three market phases for 2025, emphasizing potential recovery and opportunities for specific altcoins. Despite recent setbacks, he remains optimistic about institutional adoption and sees strategic entry points for long-term investors.
Digital asset prices are expected to face continued short-term volatility due to a lack of policy clarity from the new US administration, but medium-term opportunities could deliver significant gains, according to a report by 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. This, coupled with continued silence, could extend price corrections for major coins like Bitcoin (BTC) and Ethereum (ETH). However, he also emphasized the importance of institutional inflows, which are expected to continue increasing in the medium term.
“We recommend buying the dips in anticipation of medium-term moves higher,” Kendrick wrote.
According to the report, Bitcoin is projected to hit $200,000 and Ethereum $10,000 by the end of 2025 as institutional investors increase their allocations to crypto-related exchange-traded funds (ETFs). Kendrick further projected that pension funds would become significant holders of Bitcoin and other crypto ETFs, likely driving prices higher due to their “long-only” nature.
Kendrick outlined three distinct phases for digital assets in 2025. The first, dubbed “when hope dies,” reflects the recent price declines as market optimism wanes. The second phase, “buy the dip,” signals the potential for recovery as the administration begins implementing crypto-friendly policies. 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.
Despite recent setbacks, Kendrick remains optimistic about institutional adoption. Funds classified as “pension trusts” accounted for only 1% of Bitcoin ETF ownership as of September 2024, leaving significant room for growth.
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. While near-term downside risks persist, Kendrick concluded that the current environment presents strategic entry points for long-term investors.
“No news is bad news for now, but constructive action from policymakers will drive a robust recovery,” he added.