VanEck: the forecasts see Bitcoin at $2.9 million by 2050

The asset manager VanEck published a report yesterday in which it makes predictions about the price of Bitcoin by 2050.

Based on certain analyzed factors such as the growing economic imbalances, the wave of distrust towards institutions, and the increase in debt burden, a future value of the crypto equal to 2.9 million dollars has been hypothesized.

If this forecast seems optimistic to you, stay until the end because this is only the “base case” in a neutral perspective: the “bull case” from VanEck will make you jump for joy.

Let’s see all the details below.

VanEck and the price predictions for Bitcoin in 2050

VanEck, a well-known American asset management company, has published a very interesting report in which it makes a prediction about Bitcoin for the year 2050.

Assuming that some rather high obstacles are removed, the provider of cryptographic ETFs has hypothesized a base price of 2.9 million dollars.

The report states that Bitcoin could become a central part of the current international monetary system, given the growing deterioration of the people’s trust in institutions.

In particular, VanEck believes that various economic imbalances, geopolitical tensions, and rising debt costs will lead to valuing Bitcoin as a strategic asset.

Another factor that will drive the global adoption of cryptocurrency will likely be the decline of the global GDP relative to the current economic leaders such as the United States, EU, Regno Unito and Japan.

Matthew Sigel, head of digital asset research at Van Eck and one of the authors of the report, commented on this passage to CNBC on Wednesday:

“We think that many of these distortions stem from … a massive misallocation of capital since the global financial crisis as the G7 governments have abused printing, spending borrowed money on impossible goals.”

The spokesperson for the asset manager believes that a million-dollar forecast for Bitcoin is justified as the currency represents a hedge against this strong fiscal recklessness.

As part of the forecast, the rise of Bitcoin as a fundamental currency for local and global trade is included. In the base scenario of the report, it is written that the cryptocurrency will represent 10% of international trade settlements and 5% of GDP by 2025.

Furthermore, the growth of the layer-2 sector will make the Bitcoin blockchain increasingly efficient and scalable, making BTC comparable to an exchange currency.

If things go as hypothesized by VanEck, the price of bitcoin will increase in value by 44 times, with an annual increase of 16% compared to its current value.

Its market capitalization would be around 61 trillion dollars: to give an idea, gold capitalizes 15.9 trillion dollars.

Bitcoin as a reserve currency in the USA and the world

In the forecasts of VanEck for 2025, the theory is included that Bitcoin will become a key asset in foreign currency reserves.

Based on what has been hypothesized on the basis of the changing trends of the international monetary system, Bitcoin will gain part of the market share of FIAT currencies.

In particular, VanEck believes it will reach a weight of 2.5% in international currency reserves, at the expense of US dollar, euro, British pound, and yen.

Source: https://www.vaneck.com/us/en/blogs/digital-assets/matthew-sigel-bitcoin-2050-valuation-scenarios-global-medium-of-exchange-and-reserve-asset/#bitcoin-scaling-and-l2s

To further strengthen this optimistic theory for the future of Bitcoin in the next 26 years is the former president of the United States Donald Trump.

In recent days, many rumors have been spreading in which it is evident that the current Republican candidate could make Bitcoin a strategic reserve asset.

This Saturday he will speak at the Bitcoin Conference in Nashville and from there he might already announce something that would shake the entire cryptographic industry.

One of the major exponents of this theory is Bryan Courchesne, CEO and founder of the cryptocurrency investment company Daim, who in a recent interview stated the following:

“The Department of Justice holds about 200,000 units of bitcoin so the United States is the largest holder of bitcoin, and therefore they could easily transfer that to the Treasury Department and start from there and have 13 billion dollars of bitcoin on the balance sheet. So it is a possible move, it might just be difficult to achieve.”

It is therefore not excluded that the USA will become in all respects a holders of Bitcoin, distancing themselves from the behavior of other governments such as the German one.

This undoubtedly, in addition to removing supply from the market making it unavailable for sales, will create greater confidence and prestige in the currency. 

In this case the price of Bitcoin could easily reach the values predicted by VanEck.

The “bullish case” in VanEck’s forecast

If you think that VanEck’s prediction of $2.9 million for Bitcoin in 2050 is overly ambitious, you haven’t seen the bullish scenario yet.

What has just been described in the previous paragraphs is in fact the base scenario that takes into account neutral forces at play on the future of the cryptocurrency.

However, if Bitcoin has luck on its side, its price could see a value significantly higher than imagined.

Based on three key components, GDP of local and international trade, circulating supply of BTC, and velocity of BTC; it is possible to evaluate the potential future price movement.

According to the projections of the “bull case”, Bitcoin will reach the insane figure of 52.3 million dollars in 2050. To reach these incredible valuations, however, it should represent about 20% of all global trades and 10% of the Domestic GDP.

Source: https://www.vaneck.com/us/en/blogs/digital-assets/matthew-sigel-bitcoin-2050-valuation-scenarios-global-medium-of-exchange-and-reserve-asset/#bitcoin-scaling-and-l2s

In VanEck’s forecasts, as shown in the figure, there is also a “bear case”.

The asset manager has indeed warned investors about the potential risks that could stifle the growth in demand for Bitcoin.

First of all, the energy demand from miners requires innovation, while their revenues need to grow at a high rate to compensate for the four-year halving. To this, we must add the danger that governments may outlaw cryptocurrency, although now with the launch of ETFs in the USA it seems unlikely.

Furthermore, even the risks of competition from other currencies and the excessive control by large financial institutions could put a strong brake on the rise of Bitcoin.

In this macabre scenario, the currency would reach a price of 130,000 dollars in 2025.