This article is available in Spanish.
As Bitcoin recovers from its brief correction and approaches the $70,000 mark, Matthew Sigel, head of digital asset research at asset manager and crypto ETF issuer VanEck, shared his insights on the cryptocurrency’s potential trajectory in light of the upcoming US presidential elections and broader economic factors. in a recent CNBC interview.
Bitcoin recovery linked to M2 growth and seller depletion
Sigel noted the correlation between former President Donald Trump’s lead in betting polls against the rise of Vice President Kamala Harris and Bitcoin. He characterized Trump as the most pro-crypto candidate, suggesting his policies could benefit the cryptocurrency market.
Conversely, Sigel expressed skepticism about Harris’ understanding of Bitcoin, indicating that her administration may not be prioritizing cryptocurrency issues.
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Diving deeper into Bitcoin price dynamicsSigel highlighted several critical correlations. He pointed to a negative correlation with the US dollar and a positive correlation with global money supply growth, known as M2, which has led to the current upward trend.
Sigel also attributed the recent price recovery to the Federal Reserve’s pivot toward a reacceleration of M2 growth, in addition to what he described as a current “seller exhaustion” in the BTC market.
Furthermore, Sigel identified a promising one bullish stance for Bitcoin as the election approaches, especially its increasing correlation with the Nasdaq, which reaches a two-year high of 1.5.
Sigel recalled a similar pattern from the 2020 election, where Bitcoin showed low volatility until the election results were announced, leading to a substantial rally as new buyers flooded the market. “New buyers are born every day,” he pointed out, indicating a steady influx of interest in Bitcoin.
When discussing Bitcoin’s relationship with gold and M2, Sigel described Bitcoin as a “chameleon,” highlighting its dynamic correlations that can change over time. This variability makes it challenging to accurately predict Bitcoin’s short- and long-term behavior.
$180,000 after the election, $3 million in 2050
In addition to American political dynamics, Sigel pointed to recent activities within the US BRICS intergovernmental organization, especially the involvement of new members Argentina, the UAE and Ethiopia in Bitcoin mining.
The researcher noted that these countries are deploying government resources to mine Bitcoin to counter what he called the US’s “irresponsible” fiscal policies.
Sigel also mentioned Russia’s plans to have its sovereign wealth fund invest in Bitcoin mining through the BRICS, and proposed regulating global Bitcoin trading.
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When asked about the possible future price points for BTC, Sigel explained that historical rallies have seen increases of around 2,000%. If Bitcoin were to achieve half that increase after the election, it could reach around $180,000.
Looking further ahead, Sigel pointed to a model from VanEck’s digital asset research team, which predicted that Bitcoin would emerge as a reserve assets for world tradeheld by central banks at an interest rate of 2%. This model suggests a staggering price of $3 million per Bitcoin by that year.
At the time of writing, BTC is trading at $68,900, up 1.7% in the last 24 hours.
Featured image of DALL-E, chart from TradingView.com
