Key Points:
Investment firm VanEck forecasts Bitcoin (BTC) could achieve a price of $2.9 million by 2050. The firm anticipates Bitcoin will solidify its role as a key international medium of exchange and one of the world’s reserve currencies.
The prediction is based on the expected decline in trust in current reserve assets and the resolution of Bitcoin’s scalability issues through emerging Layer-2 (L2) solutions. According to their statement, these advancements could enable Bitcoin to more effectively meet the financial needs of the developing world.
According to VanEck, by 2050, Bitcoin will settle 10% of international trade globally and 5% domestically, while central banks will hold 2.5% of their assets in BTC.
Running this through a velocity of money equation, VanEck said Bitcoin’s price could be as high as $2.9 million, translating to a total market cap of $61 trillion. L2s collectively could be worth $7.6 trillion, or around 12% of Bitcoin’s total value.
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The model incorporates the following three elements:
One assumption in this scheme is that Bitcoin will be an essential part of the International Monetary System, gaining a share from the Principal Four Currencies. Additionally, It will capture 10% of cross-border payments and 5% of domestic trade.
VanEck assumes that 2.5% of central bank assets will be stored in BTC and that its store-of-value characteristics will remove 85% of BTC from the circulating supply. Considering a velocity for BTC of 1.5 would put the value per Bitcoin at $2.9 million, 1.66% of all financial assets globally.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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