Standard Chartered calls it: "Winter is over"

The crypto market has taken a heavy beating since $BTC notched all-time highs eight months ago. Standard Chartered's (@StanChart) global head of digital assets research, Geoff Kendrick, posited in a Friday note that Bitcoin's recent fall to nearly $59,000 marked crypto winter's most frigid conditions, representing a 53% drawdown from its peak price of $126,000 in October. With the price now recovering to around $64,000, Kendrick made his most definitive call yet: "I think we have now seen the low in crypto asset prices. Winter is over."

That marks a progression from an earlier note earlier in the week, in which Kendrick was more cautious, saying the low was "almost in" but acknowledging residual downside risk. Friday's note dropped the hedging. Kendrick wrote that confirming the turn will still require a continued fall in oil prices, renewed Bitcoin ETF inflows, and fresh buying from Strategy. His year-end target for $BTC remains $100,000.

What Drove the Sell-Off

In recent weeks, exchange-traded funds that track Bitcoin have seen some of the sharpest selling "since inception," Kendrick wrote. The Wall Street vehicles posted roughly $5 billion in net outflows since mid-May, according to CoinGlass. Kendrick argued that some of the selling likely stems from investors "selling to free up cash to enter the IPO," referring to SpaceX. SpaceX priced its IPO on June 11 and began trading on the Nasdaq today, June 12, under the ticker SPCX. At $135 per share, SpaceX raised $75 billion, making it the largest IPO ever. The offering gives the company a $1.75 trillion valuation. Not everyone accepts the IPO explanation for ETF outflows, however. Sygnum CIO Fabian Dori attributed the selling to the unwinding of arbitrage positions rather than any shift in broader sentiment.

Geopolitics also played a role. Kendrick pointed to signs of a potential peace deal between the U.S. and Iran ahead of the G7 summit, writing: "If true, [it] may sound the end to higher oil prices." Lower energy costs would ease inflationary pressure and act as a tailwind for risk assets including crypto.

Why Kendrick Says the Low Is In

In his earlier note this week, Kendrick flagged Strategy's late-May disclosure that it had sold 32 BTC, calling the timing "unfortunate." He drew a parallel with December 2022, when Strategy sold 704 BTC for tax purposes and then bought back 810 BTC just two days later. He expects any new buyback to be significantly larger, potentially 10 to 100 times the amount sold, and sees a Monday announcement from Strategy as an early confirmation signal.

Friday's note hardened that view into a firm call. Kendrick said confirming a market turnaround will rely on a continued drop in oil prices, renewed Bitcoin ETF inflows, and Strategy's appetite for buying BTC. Still, he advised clients that accumulation remains a better strategy than trying to pinpoint the exact bottom.

Sources:
Decrypt: Standard Chartered Calls Crypto Bottom as Bitcoin Recovers From $60K Fall
Kiplinger: Should You Buy SPCX Stock?
CNBC: SpaceX targets $135 IPO price at valuation of $1.77 trillion