In one appearance On CNBC’s “Squawk Box,” Matthew Sigel, head of Digital Assets Research at investment firm VanEck, predicted a significant shift in global trade dynamics with the possible adoption of Bitcoin by BRICS countries. Sigel’s insights come amid growing concerns about fiscal policy in the United States and growing efforts by emerging economies to circumvent traditional financial systems.
“We believe that once the election results are known, Moody’s will cut US debt, and that could be a catalyst for Bitcoin,” Sigel said. Highlighting the unique properties of BTC, he noted: “Bitcoin is a chameleon. It is difficult to predict what it is related to. Because of the fixed amount of 21 million there is, it is a non-American asset.”
BRICS will adopt Bitcoin: VanEck
The BRICS bloc – consisting of Brazil, Russia, USA, China and South Africa – recently expanded with five new members: Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE). This expansion increases the bloc’s combined GDP, surpassing that of the G7 countries.
“BRICS had a conference in Russia; There are six new members, so their GDP is greater than the combined GDP of the G7,” Sigel said. “Of the six new members, three – Argentina, UAEAnd Ethiopia– are mining Bitcoin with government funds. There is an urgency outside the US to find a way to get around fiscal policy here in the US.”
Russia is taking concrete steps to strengthen its BTC mining infrastructure. The country’s largest data center operator, BitRiver, is partnering with the Russian Direct Investment Fund (RDIF) to build mining and artificial intelligence computing facilities in the BRICS countries. The partnership was announced at the BRICS Business Forum in Moscow on October 18, 2024.
“We will focus on creating a mining-based infrastructure – building data centers and connecting them to the necessary energy sources to enable the implementation and development of AI projects across the country,” said Igor Runets, CEO of BitRiver.
Sigel pointed out Russia’s strategic moves: “Russia has announced that their wealth fund will invest in a regional fund to build Bitcoin mining in the BRICS countries with the idea of regulating global Bitcoin trade.”
He suggested that future geopolitical shifts could lead to broader adoption of Bitcoin in international trade. “One day, I don’t know if it will be in five or ten years, Putin will die. We are going to try to reintegrate these countries into the world system, and they are trading Bitcoin – what are we doing?”
Kirill Dmitriev, CEO of RDIF, echoed the sentiment of technological sovereignty: “The development of computing capabilities for the implementation of artificial intelligence in various industries is a priority for Russia and the BRICS alliance partners. Joint use of high-tech infrastructure will enable members to reduce costs, reduce dependence on foreign technology and control critical data.”
Notably, Sigel remains optimistic about Bitcoin’s future value. “It’s going to be a $100,000, $200,000 asset soon. The smallest rally ever was 2,000%. If we do half that, 1,000%, we would end up with $180,000,” he predicted. He expects post-election fiscal developments in the US to serve as a major catalyst for Bitcoin’s valuation. “I think after the election will be an important catalyst. You can see it on the front page of The Wall Street Journal talking about concerns about debt and budget deficits. Moody’s is telegraphing this.”
VanEck has developed a long-term model that predicts the rise of Bitcoin as a global reserve asset. “We have one model based on 2050– this is in the long term – Bitcoin becomes a reserve used in global trade and held at global central banks at a modest rate of 2%, and in that model we end up with $3 million,” Sigel revealed.
At the time of writing, BTC was trading at $71,029.
Featured image created with DALL.E, chart from TradingView.com