Bitcoin is making headlines once again as it rebounds from a brief correction, nearing the significant $70,000 milestone. In a recent CNBC interview, Matthew Sigel, the head of digital asset research at VanEck, a prominent asset manager and crypto ETF issuer, shared his perspectives on Bitcoin’s future, especially in light of the impending US presidential election and broader economic factors.
Bitcoin’s Recovery: M2 Growth and Seller Exhaustion
Sigel drew attention to an interesting correlation between former President Donald Trump’s lead in betting polls against Vice President Kamala Harris and Bitcoin’s upward movement. Trump is perceived as a pro-crypto candidate, which could result in favorable policies for the cryptocurrency market. On the other hand, Sigel expressed skepticism regarding Harris’s understanding of Bitcoin, hinting that her administration might not prioritize cryptocurrency issues.
Bitcoin’s Price Dynamics and Key Correlations
Diving deeper into the price dynamics of Bitcoin, Sigel emphasized several critical correlations. He noted a negative correlation with the US dollar and a positive correlation with the global money supply growth, known as M2, which has contributed to Bitcoin’s current uptrend. Sigel attributed the recent price recovery to the Federal Reserve’s shift towards accelerating M2 growth and what he described as a “seller exhaustion” phase in the Bitcoin market.
Moreover, Sigel pointed out a promising bullish setup for Bitcoin as the US election approaches, particularly its increasing correlation with the Nasdaq, which has reached a two-year high. He recalled a similar pattern observed during the 2020 elections when Bitcoin remained relatively stable until the election outcome was announced, followed by a substantial rally as new investors entered the market. “New buyers are born every day,” Sigel emphasized, indicating a continuous influx of interest in Bitcoin.
The Chameleon Nature of Bitcoin
When discussing Bitcoin’s relationship with gold and M2, Sigel described Bitcoin as a “chameleon,” highlighting its dynamic correlations that can shift over time. This variability makes predicting Bitcoin’s short- and long-term behaviors challenging, adding an element of uncertainty to its future trajectory.
Future Predictions: $180,000 Post-Election and $3 Million by 2050
Beyond the US political landscape, Sigel pointed to significant developments within the BRICS intergovernmental organization. Notably, new members such as Argentina, the UAE, and Ethiopia are actively engaging in Bitcoin mining, leveraging government resources to counteract what Sigel termed “irresponsible” fiscal policies of the US. Additionally, Russia’s plans to invest in Bitcoin mining through its sovereign wealth fund and propose settling global trade in Bitcoin further underscore the cryptocurrency’s growing global influence.
Potential Future Price Points for Bitcoin
Discussing potential future price points for Bitcoin, Sigel explained that historical rallies have seen increases of around 2,000%. If Bitcoin were to achieve even half of that post-election, it could potentially reach approximately $180,000. Looking even further ahead, Sigel referenced a model from VanEck’s digital asset research team, predicting that by 2050, Bitcoin could serve as a reserve asset for global trade, held by central banks at a rate of 2%. This model suggests a staggering price of $3 million per Bitcoin by that year.
At present, Bitcoin is trading at $68,900, marking a 1.7% increase over the past 24 hours. As global dynamics continue to evolve, Bitcoin’s journey remains a compelling narrative, intertwined with political shifts, economic factors, and technological advancements.
