With just over a week until the U.S. elections, market experts, including VanEck’s Matthew Sigel, are weighing in on Bitcoin potential trajectory.
Bitcoin reached a daily high of $69,230 today, rebounding from a bearish weekend that saw it dip to $65,000. In an interview with CNBC, Sigel, VanEck’s Head of Digital Assets Research, addressed Bitcoin’s correlation with the Nasdaq and the “Magnificent 7.” The CNBC host raised concerns about Bitcoin’s status as a safe haven, pointing out its recent alignment with risk assets.
Sigel explained that these correlations fluctuate over time. On a 10-year timeline, Bitcoin’s correlation with the Nasdaq is low, around 0.1. However, recently, it has risen to 0.5—a level some investors find concerning, as they prefer lower correlations with traditional risk assets.
A Very Bullish Setup for Bitcoin Heading into the Election
Nonetheless, Sigel emphasized that VanEck views the current setup as highly bullish for Bitcoin, drawing parallels to 2020. “Back then, Bitcoin lagged with low volatility and then rallied once the election results were confirmed,” Sigel noted.
“This is a very bullish setup for bitcoin into the election. We saw the exact same pattern in 2020 where bitcoin lagged with low volatility and then once a winner was announced, we had a high vol rally as new buyers come into this market,” says @matthew_sigel of @vaneck_us. pic.twitter.com/EcIzPAGAq0
— Squawk Box (@SquawkCNBC) October 28, 2024
He expects that new buyers could enter the market post-election, helping its price soar. Moreover, he suggested that if this pattern holds, a post-election U.S. sovereign debt downgrade by Moody’s could further catalyze Bitcoin’s rise.
Meanwhile, the CNBC host pressed further on whether Bitcoin correlates with the dollar and money supply growth (M2) in a similar way to gold, noting that the correlation between gold and Bitcoin seems to fluctuate.
In response, Sigel emphasized that Bitcoin is somewhat of a chameleon. Its correlations change over time, making it difficult to predict what it will be correlated within the short term.
BRICS Nations Exploring Bitcoin for Trade
The discussion shifted to Bitcoin’s fixed 21 million supply, with the host questioning whether this feature strengthens its appeal as a hedge against currency debasement. Sigel pointed out that Bitcoin is not a U.S. asset but an emerging market asset.
He noted that BRICS nations recently welcomed six new members, expanding their GDP beyond the combined GDP of the G7. Among the new members, Argentina, the UAE, and Ethiopia are incorporating Bitcoin with government resources.
“There is tremendous urgency outside of the U.S. to find a way to circumvent the irresponsible fiscal policy we’ve been pursuing here,” Sigel remarked.
He added that Russia is investing its sovereign wealth fund in regional projects to build Bitcoin mining and AI infrastructure, aiming to settle global trade in Bitcoin.
“Someday, whether in five years or ten, we’ll likely see these countries trading with Bitcoin. The question is: what will we be doing?”
Bitcoin Targets of $100,000 and $200,000 Remain Possible
When asked whether Bitcoin could hit $100,000 or even $200,000 soon, Sigel responded affirmatively. He noted that the smallest-ever trough-to-peak rally for a Bitcoin cycle was 2,000%. According to him, if the market achieves half of that, it would be a 1,000% increase, bringing the price to roughly $180,000.
As for when this could happen, he stated, “I believe after the election will be a significant catalyst.”
