Bitcoin (BTC) Not a Safe Haven Against Geopolitical Tensions, But a Hedge Against TradFi Issues: Standard Chartered

Standard Chartered's latest analyst note suggests that Bitcoin's (BTC) recent price action reaffirms its role as a hedge against traditional financial system

Standard Chartered believes that Bitcoin’s recent price action suggests it serves as a hedge against traditional financial system issues rather than geopolitical tensions.

The bank’s latest analyst note suggests that Bitcoin’s price weakness amid Middle East tensions demonstrates it is “not a safe haven against geopolitical concerns.”

This observation aligns with their previous analysis from May, following the April Israel-Iran situation. Instead, they argue that Bitcoin serves as “a hedge against TradFi issues such as bank collapses, such as SVB in March 2023, or de-dollarization/U.S. Treasury sustainability issues.”

The note highlights a “circularity” in Bitcoin’s relationship with current events. While geopolitical concerns may be pushing Bitcoin prices lower due to risk-off sentiment, these same events appear to be improving Donald Trump’s odds in the U.S. presidential race.

According to Polymarket data cited in the report, Donald Trump’s odds have increased by roughly 1% this week, creating what Standard Chartered calls “an interesting circularity for BTC.”

The analysts suggest this dynamic could ultimately benefit Bitcoin, as Trump’s improved election prospects are seen as positive for the cryptocurrency’s post-election outlook.

Supporting this view, they point to a significant increase in Bitcoin options activity, noting that “the amount of open interest for the Dec. 27 expiry at $80,000 on Deribit jumped by 1,300 BTC over the last 2 days.”

While Standard Chartered expects geopolitical concerns to potentially push Bitcoin below $60,000 before the weekend, they advise that “the dip should be bought into” based on the observed options activity and the potential upside linked to shifting U.S. election probabilities.

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