President Trump's move forward on establishing a "Crypto Strategic Reserve" has reinforced bullish bitcoin assumptions for Standard Chartered analysts.
The bank's chief digital asset analyst, Geoff Kendrick, reiterated his $500,000 target for bitcoin and said the creation of a US national strategic reserve containing bitcoin and other major cryptocurrencies has all but erased the likelihood of extreme negative outcomes for these digital coins.
"This is important because it suggests that markets can now remove the fat left-hand tail from their implied distribution of outcomes," Kendrick said in a note, first published by The Block. In other words, the probability of a major market crash or extreme downside risk has diminished.
Coming a week after crypto markets saw $3 billion in liquidations of long positions on exchanges and $2.5 billion in exchange-traded fund (ETF) selling, this "is probably enough to signal that markets can now edge higher", he said.
As markets have "moved from selling rallies to buying dips", he said he was re-focusing on his $500,000 bitcoin target.
Even before Trump's announcement, bitcoin was moving to become a stable component of global investment portfolios and Kendrick predicted the reserve announcement could lead to individual US states developing their own crypto reserves and fuel a massive round of new buying.
If more US states - and indeed other countries - develop their own bitcoin and crypto reserve programs, it could lead to each state reserve collectively holding as much bitcoin as the federal government, estimated at approximately 200,000.
StanChart's digital asset team has a $200,000 bitcoin price target for the end of 2025.
"Thereafter, we expect Bitcoin to reach $300,000 by the end of 2026, $400,000 by the end of 2027, and $500,000 by the end of 2028, where it will likely remain until the end of 2029," Kendrick says.
With Trump's announcement coming ahead of Friday’s Crypto Summit at the White House, Kendrick said markets are expecting some other policy announcements to emerge this week.