Bitcoin’s price surged past $68,000 this morning, marking a 100% increase over the past year. This surge comes amid renewed speculation about the cryptocurrency’s connection to political cycles and global economic trends. Matthew Sigel, Head of Digital Assets Research at VanEck, appeared on CNBC this morning, offering insights into Bitcoin’s recent performance and future potential.
VanEck Makes a Bold Prediction for Bitcoin in 2050
Sigel suggested a correlation between Bitcoin’s recent climb from $57,000 to nearly $70,000 and improving odds for a particular presidential candidate, echoing a pattern observed in 2020. He highlighted former President Trump as the more pro-Bitcoin candidate. However, Sigel emphasized that the most significant long-term correlations for Bitcoin are a negative correlation with the U.S. dollar and a positive correlation with M2 money supply growth. He noted the Federal Reserve’s recent policy shift has re-accelerated money growth, potentially contributing to Bitcoin’s rise.
VanEck also pointed to “seller exhaustion” as a contributing factor. He cited recent sales of Bitcoin by the German and U.S. governments, totaling $2 billion, attributing the German sale to seized assets from criminal activity. He characterized the sales as “spiteful,” suggesting an underlying governmental disapproval of the cryptocurrency. These sales, according to Sigel, have now subsided, further bolstering Bitcoin’s upward trajectory.
Addressing concerns about Bitcoin’s correlation with risk assets like the NASDAQ, Sigel argued that these correlations fluctuate. While the recent three-month correlation is high (0.5), the 10-year correlation is significantly lower (0.19). He believes this short-term correlation might be deterring some investors. Despite this, VanEck remains bullish on Bitcoin leading into the upcoming election, predicting a surge similar to the post-election rally in 2020. Sigel anticipates a potential downgrade of U.S. sovereign debt by Moody’s following the election, which could further catalyze Bitcoin’s growth.
Sigel emphasized Bitcoin’s unique characteristic of constantly attracting new buyers, comparing it to the video game industry where younger generations drive adoption. He also discussed the growing influence of BRICS nations (Brazil, Russia, India, China, and South Africa), highlighting their increasing GDP and the adoption of Bitcoin mining by new members Argentina, the UAE, and Ethiopia. Sigel pointed to Russia’s initiative to invest in Bitcoin mining and AI infrastructure across BRICS nations, with the aim of settling global trade in Bitcoin. He expressed concern about the U.S.’s potential lagging position in the evolving global financial landscape.
VanEck’s long-term outlook remains exceptionally bullish, with a projected valuation of $3 million per Bitcoin by 2050, anticipating its adoption as a global reserve asset.
