As Bitcoin rebounds from a brief correction and approaches the $70,000 level, Matthew Sigel, head of digital asset research at asset management firm and cryptocurrency ETF issuer VanEck, shared his insights on the cryptocurrency’s potential trajectory in airy of the upcoming U.S. presidential election and broader economic factors in a recent CNBC interview.

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Bitcoin Recovery Tied to M2 Rise and Seller Attrition

Sigel noted a correlation between former President Donald Trump’s situation leads in bookmaker polls against Vice President Kamala Harris and the rise of Bitcoin. He characterized Trump as the most pro-crypto candidate, suggesting that his policies may favor the cryptocurrency market.

Sigel, on the other hand, expressed skepticism about Harris’ understanding of Bitcoin, pointing out that her administration may not prioritize cryptocurrencies.

Delving into Bitcoin price dynamicsSigel highlighted several critical correlations. He pointed to a negative correlation with the US dollar and a positive correlation with the raise in the global money supply, the so-called M2, leading to the current uptrend.

Sigel also attributed the recent price recovery to the Federal Reserve’s pivot toward reaccelerating M2 growth, as well as what he described as the current “seller exhaustion” in the BTC market.

Additionally, Sigel identified a promising solution bullish setup for Bitcoin as the election approaches, particularly its rising correlation with the Nasdaq, reaching a two-year high of 1.5.

Sigel recalled a similar pattern from the 2020 election, when Bitcoin showed low volatility until the election results were announced, leading to significant rally as up-to-date buyers flooded the market. “New buyers are born every day,” he emphasized, pointing to the constant raise in interest in Bitcoin.

Discussing Bitcoin’s relationship with gold and M2, Sigel described Bitcoin as a “chameleon”, highlighting its vigorous correlations that can change over time. This volatility makes it complex to accurately predict Bitcoin’s short- and long-term behavior.

$180,000 after the election, $3 million by 2050

In addition to political dynamics in the U.S., Sigel pointed to recent activities in the framework BRICS intergovernmental organization, in particular the involvement of up-to-date members Argentina, the United Arab Emirates and Ethiopia in Bitcoin mining.

The researcher noted that these countries are using government resources to mine Bitcoin to counter what he called “irresponsible” US fiscal policy.

Sigel also mentioned Russia’s plans to have its sovereign wealth fund invest in Bitcoin mining through BRICS, proposing to regulate the global Bitcoin trade.

When asked about a potential future price points in the case of BTC, Sigel explained that historical rallies have seen increases of around 2,000%. If Bitcoin achieved half of this raise after the election, it could reach around $180,000.

Looking further into the future, Sigel referred to a model developed by digital asset research team VanEck, predicting that by 2050, Bitcoin could serve as reserve assets for world trademaintained by central banks at a rate of 2%. This model suggests a staggering price of $3 million for Bitcoin this year.

At the time of writing, BTC is trading at $68,900, up 1.7% in the last 24 hours.

Featured image from DALL-E, chart from TradingView.com