On Monday, Matthew Sigel, head of digital asset research at VanEck, an influential US investment management firm based in New York with $89.5 billion in assets under management, discussed the current state of the bitcoin market. As the sixth-largest issuer of US spot bitcoin ETFs, with $497 million in recent inflows, VanEck’s analysis of bitcoin is particularly noteworthy.
In a note For clients, shared on X, Sigel provides insights into the current factors driving Bitcoin price fluctuations. He attributes the downward pressure of the past few days primarily to significant Bitcoin sales by government entities and concerns about an impending major crisis. Mt. Gox distributions domain.
“The Mt. Gox trustee currently holds about $8 billion worth of bitcoin, and they have taken steps to distribute about $3 billion of that $8 billion,” Sigel said. He expressed uncertainty about whether creditors, who are set to receive those distributions starting in early July, would sell or hold on to their bitcoin. “Given the precedent set by GBTC“We expect that at least a quarter of these pieces will be preserved,” he added.
Sigel then explained the impact of the latest BTC moves by the US and German governments. According to Arkham data, Germany has liquid more than half of the 50,000 BTC initially seized from the piracy site Movie2k.
The telegraphed sale spooked the market and came at a time when the U.S. government reduced their BTC holdings. The latter holds a substantial amount of 213,297 BTC (approximately $12 billion). Sigel highlighted a large transfer of $240 million to Coinbase Prime on June 26, likely indicating a sale. He also commented on the strategic implications of these sales, suggesting that they may have been made during a market period sensitive to liquidity shortages, such as the July 4 holiday in the United States.
“This weak price action likely reflects government malicious selling in a relatively thin market on July 4, with the potential for additional selling to come,” he noted. Sigel also referred to recent speculations from Trump advisers on creating a strategic Bitcoin reserve within the US government, as reported by Forbes, which could signal a massive shift in policy.
Why VanEck Remains Cautious, But Bullish on Bitcoin
Discussing general market trends, Sigel observed that during bull market phases, Bitcoin rarely falls below its 200-day moving average (MAA) for more than six weeks. However, the recent government sales could change this pattern if they continue or are compounded by other negative news.
Despite these pressures, Sigel remains optimistic about macroeconomic conditions, citing a deceleration in inflation and a possible soft landing for the US economy. “The upcoming election could catalyze new all-time highs for BTC as the market anticipates four more years of deficit spending and potentially a more favorable US regulatory environment under a Trump administration,” he speculated.
Globally, Bitcoin adoption is accelerating, particularly in emerging and frontier markets. Sigel highlighted recent initiatives in Kenya, Ethiopia, and Argentina to use public energy resources for Bitcoin mining, which demonstrate a growing recognition of BTC’s potential utility and value.
In closing, Sigel reaffirmed VanEck’s investment strategy, advocating a disciplined approach to allocating BTC within diversified portfolios. “We continue to recommend a dollar-cost averaging strategy for buying Bitcoin, with 6% being a reasonable position size for both BTC and ETH in most 60/40 benchmark portfolios,” he said.
At press time, BTC was trading at $57,252.
Featured image created with DALL·E, chart by TradingView.com
