In a thought-provoking discussion on CNBC’s “Squawk Box,” Matthew Sigel, the Head of Digital Assets Research at VanEck, shed light on the potential transformation of global trade with Bitcoin’s integration by BRICS nations. As fiscal policy concerns rise in the United States, emerging economies are increasingly seeking alternatives to traditional financial systems.
Bitcoin as a Catalyst in the Face of US Fiscal Concerns
Matthew Sigel predicts a major shift in economic dynamics, asserting, “We think once the election result is finalized, Moody’s is going to downgrade US sovereign debt, and that could be a catalyst for Bitcoin.” He emphasizes Bitcoin’s unique characteristics, saying, “Bitcoin is a chameleon. It’s hard to predict what it’s correlated with. Because of the 21 million and fixed amount out there, it’s a non-US asset.”
BRICS Nations Embrace Bitcoin
The BRICS bloc—consisting of Brazil, Russia, India, China, and South Africa—has recently expanded its membership to include Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE). This expansion propels the bloc’s combined GDP to surpass that of the G7 nations.
“BRICS had a conference in Russia; there’s six new members, so their GDP is greater than the combined GDP of G7,” Sigel noted. Notably, three of the new members—Argentina, UAE, and Ethiopia—are utilizing government resources to mine Bitcoin. This highlights a growing urgency to bypass US fiscal policies.
Russia’s Strategic Moves in Bitcoin Mining
Russia is making significant strides to enhance its Bitcoin mining capabilities. The country’s largest data center operator, BitRiver, has collaborated with the Russian Direct Investment Fund (RDIF) to establish mining and AI computing facilities across BRICS nations. This partnership was unveiled at the BRICS Business Forum in Moscow on October 18, 2024.
BitRiver CEO Igor Runets emphasized the focus on infrastructure development: “We will focus on creating a mining-based infrastructure—building data centers and connecting them to necessary power sources to enable AI project deployment and development across the country.”
Sigel highlighted Russia’s strategic initiatives, stating, “Russia announced their wealth fund is going to invest in a regional fund to build Bitcoin mining throughout BRICS with an idea of settling global trade in Bitcoin.” He suggested that geopolitical shifts might lead to broader acceptance of Bitcoin in international trade.
The Future of Bitcoin in Global Trade
Kirill Dmitriev, CEO of RDIF, echoed the importance of technological independence, stating, “The development of computing capacity for the implementation of artificial intelligence in various industries is a priority for Russia and the BRICS alliance partners.” The joint use of high-tech infrastructure is expected to reduce costs, cut foreign technology dependence, and enhance control over critical data.
Sigel remains optimistic about Bitcoin’s future value, projecting, “It’s going to be a $100,000 asset soon, $200,000. The smallest ever rally was 2,000%. If we do half of that, 1,000%, we would be at $180,000.” He anticipates that post-election fiscal developments in the US will act as a significant catalyst for Bitcoin’s upward trajectory.
VanEck’s Long-Term Vision for Bitcoin
VanEck has devised a long-term model predicting Bitcoin’s rise as a global reserve asset. Sigel revealed, “We have a model that assumes by 2050—this is long term—Bitcoin becomes a reserve asset used in global trade and held at global central banks at a modest 2% rate, and in that model, we arrive at $3 million.”
At the time of writing, Bitcoin’s value stood at $71,029, highlighting its increasing worth in the global market.
