Why does Standard Chartered believe the crypto market could be entering a new growth phase?

Standard Chartered believes Bitcoin may have already established its cycle low near $59,000. The bank’s digital assets research team argues that recent price action resembles previous market turning points that occurred near the end of major corrections.

Bitcoin fell roughly 53% from its peak near $126,000 before stabilizing around the $59,000 level. While that decline was painful for investors, it was considerably smaller than the losses seen during earlier crypto bear markets.

The 2018 bear market erased more than 80% of Bitcoin’s value from peak to bottom. The 2022 downturn also produced a decline exceeding 75%, making the latest correction relatively moderate by historical standards.

This difference may reflect the growing maturity of the cryptocurrency market. Institutional investors now play a much larger role than they did during previous cycles, creating a more stable foundation for demand.

Geoffrey Kendrick, Standard Chartered’s head of digital asset research, believes many negative developments have already been priced into the market. That includes weaker investor sentiment, macroeconomic uncertainty, and sustained selling pressure from investment products.

The bank views recent capitulation among investors as another sign that a bottom may have formed. Historically, periods of extreme pessimism have often appeared near major market turning points.

Why are ETFs becoming so important for Bitcoin’s future?

One of the biggest differences between today’s crypto market and previous cycles is the growing influence of spot Bitcoin ETFs. These investment products have introduced a new class of investors into the digital asset market.

In earlier cycles, retail traders drove much of Bitcoin’s price movement. Today, institutional investors, asset managers, and corporate treasuries account for a much larger share of market activity.

Recent weeks have seen significant ETF outflows, creating additional downward pressure on Bitcoin prices. Standard Chartered believes this selling may be approaching its conclusion, removing an important obstacle for the market.

According to Kendrick, some investors may have sold ETF holdings to raise cash for participation in the highly anticipated SpaceX IPO. If that temporary source of selling fades, Bitcoin could benefit from improved demand conditions.

The bank will closely monitor ETF flow data for signs that investors are returning. A shift from outflows back to inflows would strengthen the argument that market sentiment is beginning to improve.

ETF activity has become one of the most important indicators in the crypto market. As institutional participation grows, fund flows increasingly influence both short-term price action and longer-term market trends.

What do oil prices have to do with cryptocurrency prices?

At first glance, oil prices and Bitcoin may seem unrelated. However, Standard Chartered believes developments in the energy market could have a meaningful impact on crypto performance.

The bank highlighted the possibility of improved geopolitical relations between the United States and Iran. A successful agreement could reduce concerns about energy supply disruptions and limit upward pressure on oil prices.

Lower oil prices often contribute to slower inflation growth. When inflation pressures ease, central banks face less pressure to maintain restrictive monetary policies.

That environment can help reduce Treasury yields and improve overall financial conditions. Investors typically become more willing to take risks when borrowing costs and yields begin to fall.

Risk assets such as technology stocks and cryptocurrencies often benefit from this shift. More favorable macroeconomic conditions can encourage capital to flow back into growth-oriented investments.

Standard Chartered sees this chain of events as an important part of its bullish outlook. Continued weakness in oil prices could provide additional support for Bitcoin and the broader crypto market in the months ahead.

Could institutional buyers be creating a stronger market foundation?

Institutional participation remains one of the strongest pillars supporting Standard Chartered’s outlook. Large organizations continue to view Bitcoin as a strategic asset despite recent volatility.

Corporate treasury adoption has become particularly important in recent years. Public companies are increasingly allocating portions of their balance sheets to Bitcoin as part of long-term investment strategies.

One of the most prominent examples is Strategy, which has continued accumulating Bitcoin through multiple market cycles. The company’s ongoing purchases have become a closely watched signal for institutional confidence.

Standard Chartered plans to monitor future Bitcoin purchases by major corporate holders. Continued accumulation would suggest that long-term buyers remain active even during periods of market uncertainty.

Institutional investors generally operate with longer investment horizons than retail traders. Their participation can help stabilize demand and reduce the severity of market downturns.

This growing base of institutional ownership may help explain why the current correction was less severe than previous crypto winters. Stronger underlying demand can make it more difficult for prices to collapse as dramatically as they did in earlier cycles.

Why is Ethereum part of the bullish outlook too?

Although Bitcoin receives most of the attention, Standard Chartered’s optimistic outlook extends beyond a single cryptocurrency. The bank also maintains a positive view on Ethereum’s long-term prospects.

Kendrick recently projected that Ethereum could potentially reach $4,000 by the end of the year. That forecast reflects expectations for improving market conditions and growing institutional interest.

Ethereum continues to play a central role in decentralized finance, stablecoins, and tokenization initiatives. These sectors remain among the most actively developed areas of the digital asset industry.

Institutional adoption of Ethereum has also expanded steadily. Growing interest in Ethereum-based investment products could contribute to stronger demand if market sentiment improves.

Many investors view Bitcoin as a store of value while seeing Ethereum as a platform for blockchain innovation. This distinction allows both assets to benefit from different growth drivers.

If the broader crypto market enters a recovery phase, Ethereum could participate alongside Bitcoin. Standard Chartered believes improving fundamentals across the digital asset ecosystem supports that possibility.

What could prevent the next crypto growth phase from happening?

Despite Standard Chartered’s confidence, not every analyst agrees that the bottom has already been reached. Several market observers continue to warn about the possibility of additional downside.

Some analysts believe Bitcoin remains in the final stage of a traditional bear market correction. Under this scenario, prices could still decline toward the $50,000 to $55,000 range before a lasting recovery begins.

Others point to technical indicators that have not yet fully confirmed a new bull market. Until those signals improve, skepticism is likely to remain present among some investors.

Macroeconomic uncertainty also remains a risk factor. Unexpected inflation increases, higher Treasury yields, or geopolitical tensions could create new pressure on risk assets.

For this reason, Standard Chartered is watching several indicators closely. ETF inflows, corporate Bitcoin purchases, and continued weakness in oil prices could help validate the bank’s bullish thesis.

While the future remains uncertain, the debate itself highlights an important reality. The crypto market appears to be approaching a critical turning point, and the coming months may determine whether a new growth phase truly begins or whether investors face one final test before recovery arrives.

TL;DR

• Standard Chartered believes Bitcoin likely reached its cycle low near $59,000 and that the crypto market may be entering a new growth phase.
• The bank points to easing macroeconomic pressures, slowing ETF selling, and continued institutional demand as key reasons for optimism.
• Bitcoin’s latest decline was much smaller than previous bear market crashes, suggesting stronger market support.
• Spot Bitcoin ETFs and corporate treasury buying are changing how crypto market cycles behave.
• Falling oil prices could reduce inflation concerns and improve conditions for risk assets like Bitcoin.
• Not everyone agrees with the bullish outlook, as some analysts still expect Bitcoin to fall further before a lasting recovery begins.

This article was made with AI assistance and human editing.

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