A Democrat Midterm Win Wouldn't Derail Bitcoin, VanEck's Matthew Sigel Says

Bitcoin could remain resilient even if Democrats regain political power in the U.S., according to VanEck’s Matthew Sigel.While the midterm elections could create volatility, Sigel sees the four-year cycle and a wave of capitulation signals as stronger drivers of price action going forward.Speaking on CNBC on Wednesday, Sigel said that “Biden was quite okay for Bitcoin” but also noted that altcoins may struggle more.Bitcoin’s decentralized and scarce nature could remain attractive regardless of which party controls Washington.The 12 Capitulation Signals That FlashedSigel’s improving outlook is also based on VanEck’s quantitative indicators.He said all 12 of VanEck’s capitulation signals flashed in the three months before Bitcoin’s latest rally, supporting the view that the crypto king may be nearing a cycle bottom.By that framework, 2026 would represent a bottoming year, potentially during Q3 or Q4.Sigel also highlighted the magnitude of Bitcoin’s recent five-day advance, describing it as a greater-than-three-standard-deviation event.Historically, similarly powerful moves have been followed by strong one-year Bitcoin performance.Sigel acknowledged that the initial phase of Bitcoin’s rally was driven partly by short covering and said additional upside will require fresh capital.That means Bitcoin could still enter a trading range or retrace some of its recent gains.“I think there’s going to be more dip buyers,” Sigel said than when BTC was trading in $60,000 range. Combination of capitulation signals, cycle positioning and the strength of the latest rally could be the major drivers.Why VanEck Sees Less Systemic Crypto RiskSigel also pushed back against comparisons with the market conditions preceding the collapses of FTX, Celsius and Three Arrows Capital.Unlike the previous cycle, he said much of today’s crypto leverage has migrated toward more transparent or regulated venues and instruments, including CME futures and public-market vehicles.During the previous cycle, significant leverage accumulated in opaque structures and only became apparent as firms failed.“A lot of the leverage in the system has been brought onto regulated rails,” Sigel said.Image: Shutterstock