According to VanEck’s “base scenario,” the price of the leading cryptocurrency could reach $2.9 million by 2050, driven by its adoption as a global medium of exchange and reserve currency.
We outline the scenarios and assumptions for 7-figure #Bitcoin driven by its role as a global medium of exchange and reserve currency supported by Bitcoin Layer-2 solutions. @Matthew_Sigel @Patrick_Bush_VE
https://t.co/BJfuo1iHlj— VanEck (@vaneck_us) July 24, 2024
Matthew Sigel, Head of Digital Asset Research at the firm, and Senior Investment Analyst Patrick Bush, believe that in a bearish scenario, the price could rise to $130,314. The most optimistic estimate is $52.4 million.
VanEck’s “base scenario” suggests that by 2050, Bitcoin will facilitate 10% of global trade, and central banks will convert 2.5% of their reserves into digital gold.
As a result, the cryptocurrency’s market capitalization could reach $61 trillion.
The experts based their calculations on forecasts of global economic growth, increasing debt burdens in developed countries, and changes in the international monetary system.
The report notes that solving Bitcoin’s historical scaling problem through the development of Layer-2 solutions will enable the asset to effectively serve global finance.
Amid the trend of moving away from major reserve currencies like the dollar, euro, pound sterling, and yen, cryptocurrency could serve as a gold analogue with greater flexibility and efficiency. Among Bitcoin’s other advantages, experts cited:
- immutable property rights;
- neutrality;
- immutable monetary policy;
- no need for trust.
Analysts also listed risks that could hinder the cryptocurrency’s growth. One major issue is ensuring the sustainability of mining. The asset’s extraction consumes a significant amount of energy, necessitating innovations in chip production.
Sigel and Bush described the miners’ economy as “unfortunate”—with emission reductions, they are forced to rely on fees. However, transaction fees do not provide sufficient income, as Bitcoin’s turnover rate is, for example, 30 times lower than that of the dollar.
Experts noted the threat of competition from other digital assets, as well as the possibility of coordinated efforts by authorities worldwide to impose restrictive measures on the leading cryptocurrency.
Earlier, analysts at Standard Chartered predicted Bitcoin could rise to $100,000 by the U.S. presidential elections in November. Bitwise offered a similar estimate for the end of the year.