VanEck banks on a spectacular rise in Bitcoin before the elections

Bitcoin has shown spectacular performance in recent weeks, on the eve of the 2024 American presidential elections. Indeed, the price of Bitcoin, which crossed the $71,000 mark this Tuesday, October 29, 2024, seems to benefit from a context particular economic situation and increased attention from investors. But, is this renewed interest in Bitcoin simply cyclical or does it reveal a deeper trend, particularly linked to the imminent American election? According to VanEck, a leading player in the investment space, current signals suggest a “very bullish” setup for Bitcoin, a situation eerily reminiscent of the 2020 election.

An economic context favorable to Bitcoin

VanEck, one of the world's largest asset managers, has drawn investors' attention to a market setup deemed “extremely favorable” for Bitcoin in the run-up to the US election. Matthew Sigel, head of digital assets research at VanEck, said declared during an interview with CNBC on October 28: “Our bet is that this is a very bullish setup for Bitcoin as the election approaches.” Sigel compares the current situation to that of the 2020 election, when Bitcoin remained relatively calm before beginning a sharp rise after the winner was announced. This parallel, he said, could indicate a similar pattern in 2024, with increased volatility once the election results are known.

Indeed, the recent performance of Bitcoin, which saw its price rise from $57,000 to $71,000 in the space of a few weeks, seems strongly correlated to the evolution of Donald Trump's chances on betting platforms. Platforms like Polymarket and Kalshi put Trump's chances of winning the election at between 62% and 66%. This link between Bitcoin's performance and the US elections, although complex, reflects the growing influence of political expectations on the crypto market.

Monetary policy that fuels inflation and supports Bitcoin

In addition to the electoral climate, overall economic conditions, particularly inflation, play a crucial role in the valuation of Bitcoin. Many influential voices, such as hedge fund manager Paul Tudor Jones, see Bitcoin as a hedge against inflation. During a recent appearance on CNBC, Jones said he prefers a “basket of gold, Bitcoin, commodities and tech stocks.” He completely rejects fixed rate bonds. This positioning reflects widespread fear of continued price increases, which is pushing investors to seek refuge in assets uncorrelated to fiat currencies.

According to VanEck, Bitcoin could play an even bigger role in the long term. The company projects that by 2050, Bitcoin could reach a price of $2.9 million per unit, particularly due to increased demand from central banks, which could use the crypto as a reserve asset. This scenario, although distant, demonstrates VanEck's bold vision for the future of Bitcoin as a compelling asset in the global economy. Such adoption would make Bitcoin much more than just a speculative tool, but a pillar of international monetary systems.

With the US elections approaching and facing an uncertain economic environment, Bitcoin is positioning itself as a key player in risk management for many investors. Whether through the Trump effect or the fight against inflation, crypto continues to establish itself as a credible alternative to traditional assets. However, it remains to be seen whether this favorable environment will translate into long-term gains or whether the expected post-election volatility will lead to further market turmoil. Regardless, Bitcoin's upward trajectory leaves no one indifferent.