According to asset management firm Vaneck, Bitcoin could reach 3 million dollars, with models showing its potential as a reserve asset held by central banks globally.
Is Bitcoin a Central Bank asset? The 3 million dollar target sparks major discussions.
Matthew Sigel, head of the digital asset research department at asset management firm Vaneck, analyzed the recent surge of bitcoin in an interview with CNBC last week on CNBC, pointing out the upcoming US elections as a major influence.
Sigel notes the potential link between the increasing poll numbers of former President Donald Trump and the price volatility of BTC, stating: 'Trump is clearly the candidate more supportive of cryptocurrencies and bitcoin, while Vice President [Kamala] Harris has not said a word about this issue, leading one to doubt whether she truly understands it or not.' He describes the long-term behavior of the cryptocurrency and explains: 'The most important long-term correlation for bitcoin is the negative correlation with the US dollar and the positive correlation with money supply growth or M2'.
With these economic changes, he sees strong price increase potential for BTC as the elections approach, he states:
We bet this is a very optimistic setup for bitcoin in the elections.
‘We saw the same exact pattern in 2020 when bitcoin lagged with low volatility. And then, when the winner was announced, we had a strong bull run as new buyers entered this market… The great thing about bitcoin is that every day there are new buyers emerging. Like the video game industry — the old haters will die off, the new ones will buy it — and we think that when the election results are finalized, Moody's will downgrade US public debt and that could be the catalyst for bitcoin to rise.’
Sigel also emphasized the adaptability of BTC as a 'chameleon', highlighting that 'the correlation of this cryptocurrency changes over time' so 'it is difficult to predict what it will correlate with in the short term'.
He links global events to the increasing importance of bitcoin, emphasizing it as 'a non-US asset' and 'an emerging market asset'. He points out: 'While we are all gasping about last week's elections, BRICS had a conference in Russia. There are six new BRICS members this year, so BRICS's GDP is now larger than the combined GDP of G7'.
Sigel is optimistic about the long-term growth of BTC, predicting it could reach 180,000 dollars after the elections. He explains: 'The lowest peak ever in a bitcoin bull run is 2,000%. If we take half of that figure, it would be 1,000%, which is about 180,000.' He expects the events after the elections will be a 'key catalyst' driving the price of the cryptocurrency.
‘We have a hypothetical model that by 2050… bitcoin will become a reserve asset used in global trade and held by central banks globally — with a very modest share of 2%,’ the executive further shared and explained:
In that model, we set a target price for bitcoin at 3 million dollars.
