On Monday, Matthew Sigel, head of digital asset research at VanEck, an influential U.S. investment management firm based in Fresh York with $89.5 billion in assets under management, discussed the current state of the Bitcoin market. As the sixth-largest U.S. issuer of spot Bitcoin ETFs, with $497 million in recent inflows, VanEck’s analysis of Bitcoin is particularly noteworthy.
IN note for clients, made available on X, Sigel provides insight into the current factors driving Bitcoin’s price swings. He attributes the downward pressure in recent days primarily to significant selling of Bitcoin by government entities and concerns about imminent gigantic distributions from Mt. Gox assets.
“The Mt Gox trustee currently holds approximately $8 billion in bitcoin and has taken action to distribute approximately $3 billion of that $8 billion,” Sigel explained. He expressed uncertainty about whether creditors who are due to receive those distributions starting in early July will sell or keep their bitcoin. “Given the precedent set by GBTC, we anticipate that at least a quarter of those coins will be retained,” he added.
Sigel further explained the influence of the US and German governments on recent BTC movements. According to data from Arkham, Germany has liquidated more than half of the 50,000 BTC originally seized from pirate site Movie2k.
This telegraphed sale spooked the market and came at a time when the US government was also reducing its BTC holdings. The latter holds a significant 213,297 BTC (around $12 billion). Sigel pointed to a significant transfer of $240 million to Coinbase Prime on June 26, which likely indicates a sale. He also commented on the strategic implications of these sales, suggesting that they were likely made during a market period sensitive to liquidity shortages, such as the US Fourth of July holiday.
“This weak price action likely reflects malicious selling by the government in a market that was relatively weak on the Fourth of July, with a surplus of potentially more selling to come,” he noted. Sigel also addressed recent speculation by Trump advisers about the creation of a strategic reserve of U.S. government bitcoin, as reported by Forbes, which could signal a sea change in policy.
Why VanEck Remains Cautious But Confident About Bitcoin
Referring to broader market trends, Sigel noted that during bullish phases, Bitcoin rarely falls below its 200-day moving average (MAVG) for more than six weeks. However, the recent government sell-off could change that pattern if it continues or is amplified by other negative news.
Despite these pressures, Sigel remains bullish on macroeconomic conditions, citing a slowdown in inflation and a potential supple landing for the US economy. “The upcoming election could trigger new all-time highs for BTC as the market prices in another four years of deficit spending and a potentially more accommodating US regulatory environment under the Trump administration,” he speculated.
Globally, Bitcoin adoption is accelerating, particularly in emerging and frontier markets. Sigel noted recent initiatives by Kenya, Ethiopia, and Argentina to exploit government-owned energy resources to mine Bitcoin, indicating a growing recognition of BTC’s potential utility and value.
In conclusion, Sigel reaffirmed VanEck’s investment strategy, advocating for a disciplined approach to BTC allocation within diversified portfolios. “We continue to recommend a dollar-cost averaging strategy for buying Bitcoin, considering 6% a reasonable position size for BTC and ETH in most 60/40 benchmark portfolios,” he said.
At the time of going to press, the BTC price was $57,252.
Featured image created with DALL E, chart from TradingView.com
