Matthew Sigel, Head of Digital Assets Research at VanEck, a global investment firm with $108 billion in assets under management, shared his optimistic views on Bitcoin in a recent interview with CNBC. Sigel believes that the recent Bitcoin sell-off is largely behind us and is expecting a recovery in the cryptocurrency market.
Sigel explained in the interview that the significant sell-off in Bitcoin in recent months has been driven by a variety of factors, including the loosening of carry trades, increased correlation with the Nasdaq, and significant sell-offs of Bitcoin holdings by the German and U.S. governments. Recent payments to creditors from the Mt. Gox and Genesis bankruptcies have also contributed to the selling pressure.
Despite these challenges, Sigel noted that Bitcoin’s typical seasonal pattern points to a potential recovery in the near future. He emphasized that Bitcoin typically faces challenges in the months following a halving event like the one in April, but tends to recover strongly as market conditions stabilize.
Sigel also noted a trend where Bitcoin miners, which traditionally offer high-beta transactions in cryptocurrencies, have been underperforming despite Bitcoin’s recovery. He attributed this to a lack of investor interest and a softening of high-beta assets, and also noted that these companies are increasingly making deals with artificial intelligence (AI) companies. Sigel believes that by repurposing some of their electrical capacity for AI applications, these miners could significantly improve their financial position.
*This is not investment advice.