Bitcoin’s recent rise appears linked to political shifts and global economic concerns, according to Matthew Siegel, head of digital assets research at VanEck.
In an interview with CNBC, Siegel pointed to factors such as the upcoming U.S. election, shifts in money supply, and international developments in Bitcoin mining as influencing recent price trends.
Presidential Candidates’ Impact on Market
Regarding the upcoming U.S. presidential election on Bitcoin’s price trends, Siegel explained that Bitcoin has historically reacted to shifts in political sentiment, especially when candidates viewed as favorable toward digital assets show gains in the polls.
Sales Traders from Big Banks are Talking About #Bitcoin Miners in the Walled Garden Chat Rooms
"Significant interest continues to grow"
"Crypto investor on CNBC this AM stumped the panel" pic.twitter.com/Jx8LXnqI2t— matthew sigel, recovering CFA (@matthew_sigel) October 28, 2024
Recent price movements have aligned with rising betting odds for Donald Trump, the pro-crypto candidate.
“Our bet is that 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,” said Siegel. “And once a winner was announced, we had a high-vol rally as new buyers come into this market.”
Bitcoin’s Positive and Negative Correlations
He also highlighted the significance of Bitcoin’s long-term negative correlation with the U.S. dollar. Siegel stated that periods of dollar weakening often coincide with Bitcoin price increases as investors seek alternative stores of value.
Another key factor Siegel mentioned is the correlation between Bitcoin and money supply growth, especially M2, which tracks the supply of cash and readily available funds.
Siegel pointed out that recent Federal Reserve policy adjustments have led to a re-acceleration in the money supply, contributing to renewed interest in Bitcoin.
In addition, Siegel discussed the influence of global developments on Bitcoin’s adoption. He noted that some emerging markets, particularly among BRICS nations, are integrating Bitcoin mining operations supported by government resources.
Looking ahead, Siegel remarked that global debt concerns could further drive interest in Bitcoin. He suggested that if major economies face credit downgrades, particularly the U.S., this could act as a catalyst for increased investment in Bitcoin as an alternative asset.
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