‘This is a very bullish setup for Bitcoin’

VanEck’s head of digital assets, Matthew Sigel, says the current market structure is very bullish for Bitcoin, the world’s flagship digital asset.

In an interview with CNBC’s Squawk Box on October 28, Sigel pointed out that the upcoming US elections could be an important factor for the Bitcoin (BTC) price.

The VanEck digital assets chief’s comments come as BTC surged above $68,000 and the top cryptocurrency by market cap weathered recent downward pressure. It is not yet known whether the bulls will be able to regain the psychological $70,000 level before November 5, 2024.

The price of Bitcoin, currently at $68,800, has increased by over 55% since the beginning of the year and by over 100% in the past year. Compared to previous US elections, Sigel sees BTC exhibiting similar patterns to those leading up to the 2020 election.

“This is a very positive setup for Bitcoin entering the election. We saw the same pattern in 2020 where Bitcoin was outperformed by low volatility, and then after the winner was announced, we had a high-volume rally as new buyers came into this market,” Sigel said.

That seems to be the case, Sigel told Squawk Box regarding Bitcoin’s recent rise and its relationship to betting odds for Donald Trump to win.

Basically, this is because Trump is a more pro-crypto candidate compared to Kamala Harris. For example, Polymarket’s odds shifted heavily from Harris to Trump; Trump is currently at 66%.

But the VanEck executive thinks Bitcoin’s most important correlation is a negative correlation with the US dollar and a positive correlation with money supply growth, or M2. The Federal Reserve’s pivot and sellers’ exhaustion – mainly after the German government dump – are signs that money growth will pick up again.

Sigel also added that rating agency Moody’s is ready to downgrade US government debt; This scenario is one that could increase BTC’s upward trend.