Matthew Siegel, head of digital assets research at VanEck, believes that Bitcoin’s recent surge can be attributed to political shifts and global economic concerns. In an interview with CNBC, Siegel discussed various factors that have influenced Bitcoin’s price trends.
One of the factors Siegel highlighted is the upcoming U.S. presidential election. He explained that Bitcoin has historically reacted to changes in political sentiment, especially when candidates who are favorable towards digital assets gain popularity in the polls. Recent price movements have coincided with increasing betting odds for Donald Trump, who is seen as pro-crypto. Siegel predicts that this is a bullish setup for Bitcoin leading up to the election, similar to what was observed in 2020.
Siegel also emphasized the long-term negative correlation between Bitcoin and the U.S. dollar. When the value of the dollar weakens, investors often turn to Bitcoin as an alternative store of value, leading to price increases. Additionally, Siegel pointed out the correlation between Bitcoin and money supply growth, particularly M2, which tracks the supply of cash and available funds. Recent adjustments in Federal Reserve policies have resulted in a re-acceleration of the money supply, sparking renewed interest in Bitcoin.
Global developments also play a role in Bitcoin’s adoption, according to Siegel. He mentioned that some emerging markets, particularly among BRICS nations, have started integrating Bitcoin mining operations supported by government resources.
Looking ahead, Siegel believes that global debt concerns could further drive interest in Bitcoin. If major economies, particularly the U.S., face credit downgrades, it could act as a catalyst for increased investment in Bitcoin as an alternative asset. Overall, Siegel predicts a bullish future for Bitcoin as the U.S. election approaches and various global factors continue to shape its price trends.