- The Bitcoin market could rally post-election, driven by political and economic changes.
- Sigel views Trump’s pro-Bitcoin stance as adding momentum to Bitcoin’s recent gains.
- Bitcoin’s correlations with the dollar and money supply impact institutional interest.
- Global adoption is rising, with BRICS nations exploring Bitcoin for international trade.
Matthew Sigel, the Head of Digital Assets Research at VanEck, shared his analysis of the Bitcoin market setup, identifying the upcoming U.S. election as a major catalyst.
With Bitcoin’s price up by over $70,000— 100% from the previous year, Sigel sees further gains ahead. Largely driven by shifting global and economic conditions.
The Bitcoin Market to Surge Post-Election
Sigel attributes the Bitcoin’s price, from $57,000 to over $70,000, to the improving election odds for former President Trump. So, Sigel said, “Trump is the more pro-crypto and Bitcoin candidate.” This alignment with a pro-crypto candidate, in Sigel’s view, has added momentum to Bitcoin’s performance, with an expectation of higher volatility once the election concludes.
Sigel noted a similar trend in 2020 when Bitcoin initially “lagged with low volatility,” and then surged after the election. “Once a winner was announced, we had a high-volatility rally as new buyers came into the market,” he said. So, Sigel believes this election cycle could produce another post-election rally. Potentially setting up a “significant catalyst” for the Bitcoin market to reach new heights.
Correlation with Traditional Assets and the Dollar
When analyzing the Bitcoin market behavior, Sigel observed fluctuating correlations between Bitcoin and other assets. Currently, Bitcoin shows a “.19 low” correlation with the U.S. dollar. However, this correlation has risen to “a .5” in the past three months. Hitting a “two-and-a-half-year high.” So, this evolving correlation has impacted institutional interest, with some allocators “sitting on the sidelines” in anticipation of a clear election outcome.
Bitcoin’s relationship with the U.S. dollar and money supply growth is also noteworthy. Sigel described a “negative correlation with the U.S. dollar and a positive correlation with money supply growth, or M2.” So, he attributes this growth partly to the Federal Reserve’s monetary pivot. Which has caused the dollar’s strength to fluctuate and increased Bitcoin’s appeal as an alternative asset. Sigel noted that the “German government sold Olympian in the last month,” easing government-led Bitcoin sales, which he believes has contributed to the current rally.
Global Adoption and Government Interest
Bitcoin’s international relevance is also growing as BRICS countries explore using it for trade and investment. So, Sigel cited a recent BRICS conference where six new member nations, including Argentina, UAE, and Ethiopia, joined the group. Three of these new members are “mining Bitcoin with government resources,” suggesting these countries are keen on circumventing U.S. fiscal policy. Sigel noted, “Russia announced their fund is going to invest in a regional fund to build Bitcoin mining throughout BRICS with an idea of settling global trade in Bitcoin.”
So, these global trends indicate rising Bitcoin interest outside the United States, which could put the U.S. in a unique position in the future. According to Sigel, if nations like Russia and other BRICS members begin settling international trade in Bitcoin, it may prompt questions in the U.S. on whether to align with or resist this trend. He said, “Someday, I don’t know if it’s five years or ten years… they’re trading in Bitcoin. What are we doing?”
Bitcoin Market Predictions: A Rally on the Horizon?
Sigel’s long-term outlook for Bitcoin’s valuation was striking. When asked if Bitcoin could soon become a six-figure asset, he expressed optimism, “The smallest ever rally was 2,000%. Half of that, 1,000%.”
After the election, Sigel foresees a possible catalyst that could propel Bitcoin even higher. He said that “Moody’s is going to downgrade U.S. sovereign debt,” which may create uncertainty around the dollar, leading investors to consider Bitcoin as an alternative reserve. This could make Bitcoin more appealing to both individual and institutional investors.
While Cathie Wood’s forecast of a $500,000 Bitcoin may seem ambitious, Sigel projects Bitcoin to serve as a global reserve asset. He suggests that by 2050 if Bitcoin becomes a reserved asset held by central banks with just a 2% adoption rate, it could reach a price of $3 million.
Conclusion
Matthew Sigel highlights U.S. political shifts and international economic trends to sovereign debt concerns to cause Bitcoin market rallies. As Bitcoin’s correlation with the dollar and money supply growth remains strong, the crypto market anticipates a bullish setup if election results, regulatory stances, and global adoption trends align favorably.
For investors and crypto enthusiasts, these signals hint at a potentially transformative period for Bitcoin on the world stage.
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from cryptonewsbytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
