VanEck's Director of Digital Asset Research: A major rally in Bitcoin is on the horizon, with the potential to reach $1 million within the next five years.

VanEck's head of digital asset research, Matthew Siegel, said on Wednesday that despite Bitcoin still being in a downtrend for the year, he believes a major uptrend is on the horizon. Siegel stated that Bitcoin reaching $1 million is the company's "base case scenario," and this milestone could be achieved within the next five years. He added, "This is a super trend, but it will be very volatile along the way." Currently, the price of Bitcoin is around $81,000, and although it has been in a downtrend for the year, there has been a strong rebound in the past month. Siegel pointed out several factors supporting his bullish view. The correlation between Bitcoin and the tech-heavy Nasdaq index is at its highest level in five years, driving the recent uptrend to become part of a broader macro trend. More importantly, he noted that the derivatives market has not shown signs of overheating, suggesting that the current uptrend is driven more by short covering than speculative bubbles. Siegel also emphasized demographic trends and compared the adoption of Bitcoin to the development of the video game industry. He said, "30 years ago, only kids were playing video games. Now Elon Musk is also playing video games. People won't quit playing games, and they won't give up Bitcoin either." Market participants believe that the $80,000 level is of significant psychological importance. Richard Galvin, Chairman of crypto investment firm DACM, stated that this level has been a key resistance level in the market, and if broken effectively, it could bring further upside momentum to the asset class. Additionally, according to data from prediction market Kalshi, the market sees a roughly 50% chance of Bitcoin regaining $100,000 by 2026. Since the end of February, Bitcoin has risen by about 20% following the US and Israel's attacks on Iran, demonstrating the resilience of digital assets in the face of geopolitical turmoil and rising oil prices. Signs of easing tensions in the Middle East in recent days have also boosted investors' preference for risk assets, including cryptocurrencies. The crypto market is also being driven by positive policy expectations. Investors are optimistic about the possibility of the US reaching an agreement on stablecoin yield-related terms, which may help clear obstacles for cryptocurrency-related legislation in the Senate, further boosting market sentiment. After months of intense negotiations, the US cryptocurrency market structure legislation has finally made a significant breakthrough. Senators Thom Tillis and Angela Alsobrooks have reached a comprehensive agreement on stablecoin yield terms, clearing a major obstacle for the CLARITY Act in the Senate. According to the text obtained, this compromise imposes significant restrictions on the rewards and payouts provided by stablecoins. The agreement explicitly states that all mechanisms that are "economically or functionally equivalent to" interest on bank deposits will be prohibited. This broad restriction aims to prevent stablecoins from directly competing with traditional bank savings products and addresses long-standing concerns in the banking industry about "deposit outflows." However, the agreement does not take a blanket prohibition approach but retains a considerable degree of flexibility. Stablecoin balances can be used for incentive mechanisms but must pass an "equivalence test." This means that cryptocurrency companies can still provide incentives to users under certain conditions, but models that mimic high-yield structures resembling bank interest will be blocked. This compromise has become a key turning point in the entire cryptocurrency market structure legislation. The bill aims to delineate the regulatory authority of the US Securities and Exchange Commission and the Commodity Futures Trading Commission in various areas of the digital asset ecosystem. With the resolution of the stablecoin yield issue, the legislative process is expected to gain momentum. The final text of the bill, which has made significant progress in token classification, decentralized finance regulation, and asset tokenization, is expected to be finalized soon and submitted for a vote by the Senate Banking Committee. The banking sector's concern about stablecoin yield possibly diverting deposits was the main stumbling block to legislation progress. The agreement reached not only gives the banking system more control but also preserves the core customer acquisition and incentive space for the cryptocurrency industry, seen as a pragmatic step towards clarifying cryptocurrency regulation in the US.