Standard Chartered says Trump Crypto Reserve plan puts bitcoin $500,000 target back in focus

On Sunday, President Donald Trump announced on Truth Social that he had instructed his crypto working group to "move forward" with establishing a Crypto Strategic Reserve, which would encompass Bitcoin, Ethereum, XRP, Solana, and Cardano.

The announcement led to significant volatility in the cryptocurrency market: Bitcoin's price surged from approximately $85,000 to nearly $95,000 before stabilizing around $93,000 over the past 24 hours. Concurrently, Cardano and XRP experienced substantial gains, increasing by about 40% and 16%, respectively.

Standard Chartered Head of Digital Asset Research Geoff Kendrick noted the significant price fluctuations of Bitcoin amid Trump's updated proposal on a Crypto Strategic Reserve. "We have moved from selling rallies to buying dips. And hence I re-focus on my $500,000 bitcoin target," Kendrick said in an email. 

Kendrick discussed factors he believes will drive Bitcoin toward this ambitious target in an investor note attached to the email. He said that Bitcoin is transitioning into a stable component of global investment portfolios, offering a unique hedge against challenges facing traditional finance. He anticipates that increased investor access will be a primary catalyst for long-term Bitcoin price appreciation.

"Given these developments, which align with our previous expectations, we continue to target Bitcoin to reach $200,000 by year-end 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," he said.

Trump's announcement could drive U.S. state bitcoin reserves

Furthermore, Kendrick highlighted the strategic importance of Trump's crypto reserve initiative. He suggested that this move could pave the way for U.S. states to develop their own Bitcoin reserve programs, potentially leading them to collectively hold as much Bitcoin as the federal government, estimated at approximately 200,000 BTC.

The timing of Trump's announcement, just ahead of this Friday’s Crypto Summit at the White House, has heightened expectations for tangible developments in crypto policy. Kendrick noted that markets are anticipating significant policy advancements from the upcoming summit.

Additionally, Kendrick observed the market's mixed performance in recent weeks. He pointed out that February marked Bitcoin's worst monthly performance since June 2022, presenting challenges for the pro-crypto administration. However, the subsequent weekend saw the most favorable price movements since January 2021. "That combination of the worst month in 2.5 years followed by the best weekend in 4 years looks to me like the first solid data point of a 'Trump put' for crypto, similar to the 'Fed put' for stocks," he said in the email.

The "Fed put" refers to the Federal Reserve's potential to intervene in markets to prevent significant downturns, thereby providing a safety net for investors. Similarly, the "Trump put" suggests that market participants perceive the Trump administration's policies as supportive of the cryptocurrency market, offering a form of implicit protection.

Kendrick suggests that Trump's Crypto Reserve announcement means the likelihood of adverse, extreme negative outcomes has now diminished."This is important because it suggests that markets can now remove the fat left-hand tail from their implied distribution of outcomes," Kendrick said. "Removing bad outcomes after a week which saw $3 billion in liquidations of long positions on exchanges and $2.5 billion in exchange-traded fund (ETF) selling is probably enough to signal that markets can now edge higher."