Bitcoin to the moon? Prestigious asset manager VanEck certainly thinks so: the New York City-based firm said in a report this week that the biggest cryptocurrency by market cap could hit a price of more than $2.9 million per coin by the year 2050.
And that’s not even the bullish prediction. The firm’s digital assets research team added that if current reserve currencies continue to decline in importance, Bitcoin becomes an attractive option as a result, and scaling networks improve, then the asset could reach a price of $52,386,207 by that year.
Bitcoin’s price currently stands at $64,896 per coin, according to CoinGecko, but has risen 95,564% in 11 years.
“We expect BTC to be widely used in international trade, becoming a significant medium of exchange and a valuable store of wealth,” the report written by Matthew Sigel and Patrick Bush reads.
The two added that “as BTC becomes more useful and valuable, central banks and long-term investors will want to hold more BTC, reducing the amount available in the floating supply.” That could push the price up even further.
By examining the world’s GDP, observing current growth projections, the report said that it was likely that “2.5% of central bank assets will be held in BTC” as a base projection—which could push the coin’s price up to $2.9 million.
And if the total trade conducted around the world using Bitcoin increases even more, and less of the digital currency is available in circulation, then the price could reach the stratospheric level of over $52 million, it added.
But the report noted that scaling networks were necessary in order for Bitcoin to be widely used. “If Bitcoin cannot become an important medium of exchange because adequate scaling is not completed, our core thesis for its meteoric rise will be broken,” it read.
As a bearish outlook, the two predicted that the price of the asset could reach just over $130,000 per coin. This would happen, they argued, if more digital coins remain in circulation and total trade conducted in the asset is significantly lower.
Scaling networks—often known as “layer-2” or sidechain networks—are designed to help using Bitcoin be faster and cheaper via the use of external, supporting blockchains. Currently, the network can be slow and expensive when a lot of people use it. Scaling options such as the Lightning Network aim to fix that.
The report predicted that “financial entities across the world will compete to build their L2s to house each’s BTC activities, including trading, exchange, and lending.”
Edited by Andrew Hayward
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Source: https://decrypt.co/241663/bitcoin-price-52-million-by-2050-vaneck
