- Matthew Sigel revealed that VanEck opted out of Strategy because it didn’t find any sense in its leveraged Bitcoin proposition.
- VanEck’s Head of Digital Asset Research warns that adding leverage to BTC’s volatility is a sure way to bankruptcy.
- He also highlighted that people still need Bitcoin despite the rising prominence of stablecoins.
Matthew Sigel, Head of Digital Asset Research at VanEck, sat down for a Q&A at CNBC’s Squawk Box on Friday, discussing his thoughts on the state of the (BTC) market. His interview follows the comments of Michael Saylor, Executive Chairman of Strategy (MSTR), which one of the hosts claimed have amplified concerns about the future of their digital asset treasury playbook and the overall Bitcoin and crypto industry.
Sigel bluntly responded that VanEck analysts didn’t find much sense in Strategy’s digital asset treasury (DAT) model in the first place. He explained Bitcoin already has “a lot of reflexivity,” so there’s no longer a need to add leverage on top of it. It’s the reason why VanEck opted out of MSTR.
Additionally, the VanEck official emphasized that there are currently many ways to gain exposure in Bitcoin, including exchange-traded funds (ETFs). These further make a leveraged proposition via Strategy unnecessary for investors.
Sigel warned that Bitcoin has no CEO, so it does not offer a bailout. Hence, adding leverage to its existing volatility is a sure way to bankruptcy.
The expert instead recommended investors to focus on the spot market and avoid getting distracted by leverage players.
Saylor’s Negative Projections on Bitcoin
Saylor recently admitted that Bitcoin will see more dips in the near term, as it has been in a bear market for 4 months. Such a statement coming from a Bitcoin permabull or maxi has sounded the alarm bells louder in the crypto community.
However, when CNBC asked Saylor whether their company plans to sell Bitcoin amid their mounting unrealized losses in the asset and investors’ fears that they may go bankrupt, the Strategy chair answered in the negative. He boldly claimed that they will continue buying BTC and they will “refinance the debt” if needed.
Critics cautioned that the flaws in Strategy’s so-called infinite money glitch may be unraveling.
Factors Contributing to Bitcoin’s Ongoing Decline
Sigel highlighted that Bitcoin has been undergoing a “historic decline,” as the coin’s price fell by 50% from its all-time high above $126,000. However, he believes its realized volatility has dropped by around 50% compared to the harsher 2022 correction, which saw BTC pull back by roughly 80%.
One of the primary culprits Sigel identified was the uncertainty amid the delays in the USA’s Clarity Act. Then there’s the disclosure from the Trump family that they have begun unloading their control over World Liberty Finance, which has fueled doubts about where the market is heading next.
Do We Still Need Bitcoin?
Interestingly, another host asked Sigel if people still need Bitcoin, because they already have stablecoins. He answered that individuals blessed with different payment apps and ways to transfer funds don’t actually need it.
On the other hand, billions of people in areas with high inflation, low-trust societies, and limited access to stable currencies like the US dollar need BTC. Furthermore, he said that Bitcoin mining offers countries with excess energy a way to convert their surplus into an economically rewarding activity.
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