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Bitcoin could reach $3 million, according to asset manager Vaneck, with a model showing its potential as a reserve asset held by global central banks.
Bitcoin as Central Bank Asset? The $3M Target Driving Big Conversations
Matthew Sigel, head of digital assets research at asset management firm Vaneck, analyzed bitcoin’s recent rise in an interview with CNBC last week on CNBC, pointing to the upcoming U.S. election as a major influence.
Sigel noted a potential link between former President Donald Trump’s rising polling numbers and BTC’s price movement, stating: “Trump is clearly the more pro-crypto and bitcoin candidate and VP [Kamala] Harris has not said a single word on it so one doubts whether she truly understands it.” He described the crypto’s long-term behavior, explaining: “The most significant long-term correlations for bitcoin are a negative correlation with the U.S. dollar and a positive correlation with money supply growth or M2.”
With these economic shifts, he sees a strong case for BTC’s potential rise as the election approaches, stating:
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. And then once a winner was announced, we had a high vol rally as new buyers came into this market … The great thing about bitcoin is that every day there’s new buyers being born. It’s kind of like the video game industry — the olds who hate it die off, the new folks are buying it — and what we think is that once the election result is finalized, Moody’s is going to downgrade U.S. sovereign debt and that could be a catalyst for bitcoin going up.”
Sigel also highlighted BTC’s adaptability as “a chameleon,” emphasizing that the cryptocurrency’s “correlations change over time” so “it’s hard to predict what it’s going to be correlated with over the short term.”
He linked global events to bitcoin’s growing importance, emphasizing it as “a non-U.S. asset” and “an Emerging Markets asset.” He pointed out: “While we were all hyperventilating about the election over the last week, BRICS had a conference in Russia. There are six new members of BRICS this year so BRICS GDP is now greater than the combined GDP of G7.”
Sigel is optimistic about BTC’s long-term growth, projecting that it could reach $180,000 following the election. He explained: “The smallest ever trough to peak rally for a bitcoin cycle was 2,000%. If we do half of that, that’d be 1,000%, that’d be roughly 180,000.” He expects events following the election to be “a significant catalyst” driving the cryptocurrency’s price.
“We have a model that assumes that by 2050 … bitcoin becomes a reserve asset that’s used in global trade and held by global central banks — at a very modest 2% weight,” the executive further shared, elaborating:
In that model, we arrive at a $3 million price target for bitcoin.
“Now that sounds, you know, extreme but that’s a 16% compound annual growth rate for a couple of decades … that’s not really that extreme.