In appearance on CNBC’s “Squawk Box,” Matthew Sigel, director of digital asset research at investment firm VanEck, predicted a significant change in global trade dynamics with the potential adoption of Bitcoin by BRICS countries. Sigel’s observations come amid growing concerns about fiscal policy in the United States and growing efforts by emerging economies to bypass customary financial systems.
“We believe that Moody’s will downgrade U.S. government debt once election results are finalized, which could be a catalyst for Bitcoin,” Sigel said. He highlighted BTC’s unique properties, noting: “Bitcoin is a chameleon. It’s hard to predict what this is related to. Due to the amount of 21 million and the fixed amount, it is a non-U.S. asset.”
BRICS will adopt Bitcoin: VanEck
The BRICS bloc – which includes Brazil, Russia, India, China and South Africa – recently expanded with five up-to-date members: Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE). This expansion increases the bloc’s combined GDP to above that of the G7 countries.
“BRICS held a conference in Russia; we have six new members, so their GDP is larger than the combined GDP of the G7,” Sigel said. “Of the six new members, three of them – Argentina, the United Arab Emirates and Ethiopia – mine Bitcoin using government resources. Outside the US, there is an urgent need to find a way 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, has partnered with the Russian Direct Investment Fund (RDIF) to build artificial intelligence mining and computing facilities in BRICS countries. There was a partnership announced at the BRICS Business Forum in Moscow, October 18, 2024.
“We will focus on creating mining-based infrastructure – building data centers and connecting them to the necessary power sources to enable the implementation and development of AI projects across the country,” said BitRiver CEO Igor Runets.
Sigel noted Russia’s strategic moves: “Russia announced that their wealth fund will invest in a regional fund aimed at developing Bitcoin mining across the BRICS with a view to regulating global Bitcoin trade.”
He suggested that future geopolitical changes could lead to wider acceptance of Bitcoin in international trade. “One day, I don’t know if it will be five or ten years, Putin will die. We are going to reintegrate these countries into the world system and they are trading Bitcoin – what do we do?”
Kirill Dmitriev, CEO of RDIF, reiterated the sense of technological sovereignty: “The development of computing power for the implementation of artificial intelligence in various industries is a priority for Russia and BRICS alliance partners. Shared use of high-tech infrastructure will enable members to reduce costs, reduce dependence on foreign technology and control critical data.”
It’s worth noting that Sigel remains confident about Bitcoin’s future value. “Soon it will be a $100,000, $200,000 estate. The smallest increase in history was 2,000%. If we do half of that, or 1,000%, we will get $180,000,” he predicted. He predicts that fiscal developments after the US elections will be a significant catalyst for Bitcoin’s appreciation. “I think it will be a significant catalyst after the election. You can see it on the front page of The Wall Street Journal, where it talks about concerns about the debt and deficit. Moody’s telegraphs it.”
VanEck developed a long-term model predicting the rise of Bitcoin as a global reserve asset. “We have a model that assumes that by 2050 – this is the long-term perspective – Bitcoin will become a reserve asset used in global trade and held in global central banks at a modest rate of 2%, and in this model we reach the figure of $3 million.” – Sigel revealed.
At the time of publication, the BTC price was $71,029.
Featured image created with DALL.E, chart from TradingView.com
