VanEck Report: BTC may reach $2.9 million by 2050

Source: Blockchain Knight

In its latest research report, VanEck has put forward an ambitious scenario that under "existing conditions", BTC will be worth a staggering $2.9 million per coin by 2050.

According to the report written by the company's head of digital assets Matthew Sigel and senior investment analyst Patrick Bush, the projected valuation depends on the adoption of BTC as a global medium of exchange and reserve asset, which has the potential to revolutionize the international financial system.

According to the company's basic forecast, the price of BTC will reach $2.9 million per coin. At the same time, in a bear market scenario, the price of BTC is expected to reach a minimum of $130,314, while in a bull market scenario, the price of BTC will soar to $52.4 million per coin.

According to VanEck's basic assumptions, by 2050, BTC will be used to process 10% of the world's international trade and 5% of domestic trade. The company also predicts that central banks will hold 2.5% of BTC assets.

Based on global economic growth forecasts and currency velocity, BTC’s potential price will reach $2.9 million and its total market capitalization will reach $61 trillion.

The report highlights that BTC’s scalability issues have historically been a major barrier to BTC adoption, which will be addressed by emerging BTC L2 solutions. These solutions can enable BTC to support the global financial system and better meet the needs of developing countries.

VanEck’s analysis delves into current trends in the International Monetary System (IMS), predicting a shift away from traditional reserve currencies such as the dollar, euro, pound, and yen.

The report attributes this potential shift to the fact that these economic leaders have experienced declining GDP shares, deficit spending, geopolitical decision-making, and other issues, which indirectly lead to a weakening of confidence in their currencies.

The report also adds that as inflation and currency devaluation continue to rise, global businesses and consumers may recognize the general shortcomings of alternative fiat currencies.

This will ultimately highlight BTC’s potential as a “neutral medium of exchange with immutable property rights” and “predictable monetary policy,” the report says.

VanEck outlined several key areas where BTC could transform IMS. For example, BTC’s immutable monetary policy and decentralized nature could make it a reliable reserve currency, similar to gold, but with greater flexibility and efficiency.

L2 solutions such as the Lightning Network and various sidechains will expand BTC’s transaction capabilities, enabling large-scale international trade.

Despite the optimistic outlook, VanEck also acknowledged that there are some risks that could hinder BTC’s development.

One of the main issues is that the energy requirements for BTC mining will rise significantly in the future, which may require new innovations in chip design and energy production.

In addition, as BTC’s inflation rate decreases, transaction fees must become the main source of income for miners and enable them to operate continuously.

The company also emphasized that other Crypto assets and potential technological advances pose a competitive threat to BTC.

In addition, coordinated efforts by governments around the world to ban or regulate BTC could seriously affect BTC’s adoption and value, depending on the approach taken by each government.

VanEck’s detailed analysis presents a compelling future vision for BTC, highlighting its potential to become a cornerstone of the global financial system.

While significant challenges remain, the research highlights the transformative impact that BTC and its L2 solutions could have on international trade and finance by 2050.