A recent report from Standard Chartered suggests that a potential second term for Donald Trump could have a significant positive impact on Bitcoin and other digital assets, positioning them as viable alternative investments.

The report delves into how potential US fiscal policies under a Trump administration could steer investor interest towards Bitcoin and other cryptocurrencies.

Additionally, the lender has revised its outlook on Bitcoin's price performance, believing that the cryptocurrency reached its local bottom on May 1.

StanChart analyst Geoffrey Kendrick stated to CryptoSlate:

"I am happy to say I was too pessimistic about BTC's break below 60k last week... Things are improving, and we have likely seen the low (at 56.5k on May 1)."

Kendrick attributed the outlook revision to a "less hawkish than feared FOMC and a friendly US jobs report," which have led to increased inflows into spot Bitcoin ETFs following a week of record outflows.

Standard Chartered reiterated its price target of $150,000 per Bitcoin by the end of 2024, rising to $200,000 by the end of 2025. These bullish targets depend on various factors, including global fiscal conditions, US electoral outcomes, and evolving regulatory dynamics concerning digital currencies.

Regarding Trump's potential presidency, the StanChart report suggests that it could foster a regulatory environment supportive of digital assets. It anticipates legislative changes, such as the approval of US spot exchange-traded funds (ETFs) for cryptocurrencies, which could enhance accessibility and legitimacy for Bitcoin and similar assets, potentially attracting a broader range of institutional and retail investors.

Examining fiscal patterns from Trump's previous term, the report notes a significant reduction in foreign official US Treasury (UST) buyers' holdings, with net selling averaging $207 billion annually. In comparison, during Biden's term, this figure decreased to an average of $55 billion per year. The report speculates that Trump's re-election could accelerate these trends, leading to a faster shift from US Treasuries to alternative financial assets like Bitcoin and gold.

The report also discusses Bitcoin's role as a hedge, drawing comparisons to gold. It suggests that Bitcoin, like gold, tends to perform well during banking stress or significant monetary expansion by central banks. However, it notes a key difference between the two: Bitcoin's performance during periods of heightened geopolitical risk doesn't match gold's stability. This difference is partly attributed to Bitcoin's association with the tech sector, making it more volatile and sensitive to global tensions.