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The second half of the year is set to be “Bitcoin’s best ever” in terms of dollar gains, according to Standard Chartered.
Standard Chartered Global Head of Digital Assets Research Geoffrey Kendrick said this in a note sent to investors on Wednesday, citing a convergence of inflows to exchange-traded funds, demand from corporate treasuries and US policy developments.
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Kendrick believes that Bitcoin will see higher demand from ETFs and corporate treasuries in Q3 and Q4 than it did in Q2, citing encouraging inflows despite broader uncertainty and the emergence of more corporate treasuries.
In Q2, ETFs saw net inflows totalling $12.4 billion, equivalent to purchasing 120,000 BTC, Kendrick said. He said the flows, which represent the second-largest quarterly buying spree on record for the category, were particularly noteworthy as they managed to edge out gold ETFs despite conflict in the Middle East. In comparison, gold ETFs saw only $6.9 billion in inflows, he said.
Meanwhile, corporate treasuries acquired 125,000 BTC in Q2, also the second largest quarterly haul for the category, Kendrick said. MicroStrategy (NASDAQ:MSTR) scooped up 69,000 BTC while other treasury firms purchased 56,000 BTC.
“While MSTR’s pace of buying has slowed in recent months, the Q2 surge in non-MSTR buying suggests that newer entrants to the space can take up any slack in Q3,” Kendrick wrote. “As a result, we expect Bitcoin treasuries as a whole to buy more BTC in Q3 than they did in Q2 – a positive driver of flows.”
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Kendrick also said he expected to see broader buying of ETFs and corporate treasury stocks by sovereign interests in quarterly filings expected in August.
“Both the confirmation of broader sovereign interest and the flows themselves should be BTC-positive,” he said.
On the policy front, Kendrick said Bitcoin is likely to benefit from the anticipated passage of the stablecoin bill known as the GENIUS Act. He said the passage of the bill would broaden the use cases for cryptocurrencies and embolden people to make their first investments in space.
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Beyond the passage of the GENIUS Act, Kendrick said Bitcoin is likely to see a boost if President Donald Trump follows through on his reported plan to announce Federal Reserve Chair Jerome Powell‘s replacement in September or October, months ahead of the end of his term next May.
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Kendrick said that such a move could lead markets to price in interest rate cuts early and also increase concerns about the independence of the Fed. He said both of these could lead to an increase in the 10-year Treasury term premium, to which Bitcoin appears strongly correlated.
All told, Kendrick predicts that Bitcoin will hit $135,000 in Q3 and $200,000 in Q4. But he does not believe that it would be a straight run to the top.
Kendrick said he expects the market to stall in late Q3 and early Q4 as traders speculate whether Bitcoin will repeat its historical 18-month post-halving slump. He, however, expressed confidence that the pattern typically driven by selling from long-term holders will no longer repeat, betting that any such selling will likely be absorbed by demand from ETFs and corporate treasuries.
At last look, Bitcoin is trading at $109,500, just 2% shy of its all-time high.
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This article Why Standard Chartered Says H2 2025 Will Be ‘Bitcoin’s Best Ever’ originally appeared on Benzinga.com