As the elections in the U.S. approach, Matthew Sigel of VanEck visualizes a potential Bitcoin (BTC) upsurge after the polls. Recovering from the weekend low of $65,000, bitcoin spiked to an around-daily high of $69,230.
The recent price shifts in Bitcoin are attributed to market dynamics. However, there is potential for gains ahead after the election by Sigel, VanEck’s Head of Digital Asset Research.
Bitcoin’s Volatility Patterns Signal Possible Post-Election Surge
Sigel points out Bitcoin’s shifting correlation with traditional assets such as the Nasdaq and the Magnificent 7 tech stocks. BTC, which has a very low 10-year correlation with Nasdaq (0.1), is now correlating with 0.5. As this correlation rises, some investors are starting to question Bitcoin’s independence from traditional risk assets.
BTC’s classic historical volatility patterns are once again on their game, reassures Sigel. He cited the lead-up to 2020, when it shot up post-election.
BTC price stability is something he points to as a harbinger of potential buyer interest after election results. He believes institutional buyers may be persuaded to enter the market before the upcoming election, which may increase Bitcoin’s price.
U.S. Debt Concerns Could Boost BTC Demand
According to Sigel, a post-election US sovereign debt downgrade could impact the price of BTC in the future. A downgrade could spark the sale of alternative assets and cause demand for Bitcoin. Moody’s recent U.S. credit rating warning, which pointed to worries about the nation’s fiscal health, supports this possible scenario.
What’s different about BTC is that it has a fixed 21 million supply; it’s decentralized, and Sigel says that could make it appealing.
With no connection to central banks, BTC may draw investors worried about currency debasement. Therefore, Bitcoin may gain more demand from people looking for money stability, which is different than regular monetary systems.
According to Sigel, BTC continues to attract the attention of countries with emerging economies, with BRICS playing a vital role in the process.
Recently, BRICS has accepted countries such as Argentina, the UAE, and Ethiopia as part of its membership, as these countries are showing greater interest in Bitcoin integration. The above countries use Bitcoin for government-backed projects to stabilize against foreign currency risks.
He goes on to state that Russia has used its sovereign wealth fund to develop Bitcoin mining infrastructure while diversifying trade options. Russia’s Bitcoin move can be a precedent for other nations to consider Bitcoin for global transactions. This indicates an increasing requirement by non-Western countries, who want to cut dependency on the US Dollar.
Institutional Interest May Boost BTC Price
Matthew Sigel says that if the market conditions are right, BTC could eclipse those levels, reaching anywhere between $100,000 and $200,000 following the election.
Referring to Bitcoin cycles in the past, he points out that the gaps from trough to peak for previous rallies have been even more significant, with some posting rallies exceeding 2,000%.
Sigel projects that even a BTC rise of as much as 1,000% will only put the cryptocurrency’s price around $180,000 if momentum is gained after the election.
Sigel says, however, that while BTC’s short correlations to other traditional assets change, its long-term outlook appears promising. While he says new interest may be sparked by the upcoming election, institutional and retail investors are looking at Bitcoin as a hedge.
Post-election developments, including potential shifts in fiscal policy, could further enhance the appeal of Bitcoin as an alternative asset, he said.
