During an 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 potential adoption of Bitcoin by the BRICS countries. Sigel’s ideas come amid growing fiscal policy concerns in the United States and growing efforts by emerging economies to circumvent traditional financial systems.
“We believe that once the election result is finalized, Moody’s will downgrade the US sovereign debt rating, and this could be a catalyst for Bitcoin,” Sigel said. He highlighted the unique properties of BTC, noting: “Bitcoin is a chameleon. It is difficult to predict what this is related to. Due to the 21 million and fixed amount available, this is a non-US asset.
BRICS will adopt Bitcoin: VanEck
The BRICS bloc, made up of Brazil, Russia, India, China and South Africa, recently expanded to include five new members: Egypt, Ethiopia, Iran , Saudi Arabia and the United Arab Emirates (UAE). This expansion increases the bloc’s combined GDP to exceed that of the G7 countries.
“BRICS held conference in Russia; there are six new members, so their GDP is higher than the combined GDP of the G7,” Sigel said. “Among the six new members, three of them – Argentina, the United Arab Emirates and Ethiopia – are mining Bitcoin with government resources. There is an urgent need outside the United States to find a way around fiscal policy here in the United States.”
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 mining and artificial intelligence computing facilities in BRICS countries. The partnership was announced at the BRICS Business Forum in Moscow on October 18, 2024.
“We will focus on creating mining-based infrastructure, building data centers and connecting them to the necessary energy sources to enable the deployment and development of AI projects across the country “, said Igor Runets, CEO of BitRiver.
Sigel highlighted Russia’s strategic moves: “Russia announced that its wealth fund will invest in a regional fund to develop Bitcoin mining in the BRICS with the aim of settling the global Bitcoin trade. »
He suggested that future geopolitical changes could lead to greater acceptance 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 seek to reintegrate these countries into the global system, and they are trading Bitcoin – what do we do?
Kirill Dmitriev, CEO of RDIF, echoed the sentiment of technological sovereignty: “The development of computing capacity for the implementation of artificial intelligence in various industries is a priority for Russia and alliance partners BRICS. Joint use of high-tech infrastructure will allow members to reduce costs, reduce dependence on foreign technologies and control critical data.
Notably, Sigel remains optimistic about the future value of Bitcoin. “It will soon be a $100,000, $200,000 asset. The smallest increase ever recorded was 2,000%. If we do half of that, 1,000%, we would be at $180,000,” he projected. He predicts that post-election fiscal developments in the United States will serve as an important catalyst for Bitcoin appreciation. “I think post-election will be an important catalyst. You can see him on the front page of the Wall Street Journal talking about debt and deficit problems. Moody’s telegraphs it.
VanEck developed a long-term model predicting Bitcoin’s ascendancy as a global reserve asset. “We have a model that assumes that by 2050 (i.e. long term), Bitcoin will become a reserve asset used in global commerce and held in global central banks at a modest rate of 2 %, and in this model we arrive at $3 million,” Sigel revealed.
At press time, BTC was trading at $71,029.
Featured image created with DALL.E, chart from TradingView.com
