Bitcoin reached a daily high of $69,230, rebounding strongly from a weekend slump that saw the cryptocurrency dip as low as $65,000. Speaking to CNBC, Matthew Sigel, VanEck’s Head of Digital Assets Research, offered insights into Bitcoin’s recent trajectory and its alignment with traditional market assets, specifically the Nasdaq and the tech-driven “Magnificent 7” stocks.
Bitcoin And Traditional Market Correlations
Sigel acknowledged a recent uptick in Bitcoin’s correlation with the Nasdaq, rising from a decade-low of 0.1 to around 0.5. While some investors view this alignment with risk assets as a drawback, Sigel argued that the correlation fluctuates over time, noting, “Bitcoin is somewhat of a chameleon.” Historically, Bitcoin has proven difficult to categorize, displaying characteristics of both a risk asset and a hedge, especially during times of economic upheaval.
Bullish Setup – Bitcoin and the U.S. Election
With the U.S. election around the corner, Sigel sees a bullish pattern emerging that mirrors the events of 2020. During that year, Bitcoin experienced a low-volatility period leading up to the election, only to see a high-volatility rally once results were confirmed. Sigel expects a similar outcome, with new buyers entering the market after election uncertainty clears, creating a potential surge in Bitcoin’s value.
Further, Sigel suggested that Bitcoin could see another boost if Moody’s issues a post-election downgrade of U.S. sovereign debt. This downgrade, coupled with ongoing concerns about U.S. fiscal policy, could push investors to seek Bitcoin as a hedge against dollar depreciation and growing inflation.
While Bitcoin’s correlation with assets like the dollar and M2 money supply continues to evolve, the discussion spotlighted Bitcoin’s appeal as a non-U.S. asset, particularly in emerging markets. Sigel pointed out that BRICS nations, including Argentina, the UAE, and Ethiopia, are incorporating Bitcoin into national resources, with Russia investing heavily in regional Bitcoin mining infrastructure. This trend highlights Bitcoin’s growing role in global trade, especially as BRICS nations seek alternatives to U.S.-dominated financial systems.
“There is tremendous urgency outside the U.S. to find a way to circumvent irresponsible fiscal policy,” Sigel commented, adding that these nations might soon rely on Bitcoin for trade settlements, given its fixed supply of 21 million coins—a sharp contrast to the dollar’s inflation-prone nature.
Also Read: Bitcoin Nears ATH At $68,880 – Key Levels And Macro Trends Fuel 5% Weekly Surge
Path to $100,000 and Beyond
When asked about Bitcoin’s long-term price potential, Sigel was optimistic. He noted that the smallest trough-to-peak rally for Bitcoin has been around 2,000%, suggesting that even half of this growth could push Bitcoin’s price to approximately $180,000. With the upcoming U.S. election as a potential catalyst, Sigel hinted that these lofty targets could be within reach sooner than later, reinforcing Bitcoin’s reputation as both a high-growth asset and a hedge against traditional economic risks.
In sum, VanEck’s bullish view on Bitcoin underscores its growing significance in a world where fiscal policies and inflation concerns are driving investors to consider alternative assets. As the election approaches and geopolitical pressures build, Bitcoin’s price trajectory will be one to watch closely.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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