TLDR
- VanEck predicts Bitcoin could reach $2.9 million by 2050
- This prediction assumes Bitcoin becomes 10% of global trade and 5% of nominal GDP
- VanEck cites economic imbalances and distrust in institutions as factors
- Concerns include energy costs of Bitcoin mining and potential international bans
- VanEck analysts expect central banks to hold 2.5% of assets in Bitcoin by 2050
VanEck, a major asset management firm, has released a report predicting that Bitcoin could reach a value of $2.9 million per coin by 2050.
This forecast comes from the company’s “Bitcoin 2050 Valuation Scenarios” report, authored by Matthew Sigel, Head of Digital Assets Research, and Patrick Bush, Senior Investment Analyst at VanEck.
The prediction is based on several assumptions about Bitcoin’s future role in the global economy.
VanEck suggests that by 2050, Bitcoin could represent 10% of global trade, 5% of the nominal GDP, and 2.5% of international currency reserves. This would result in a total market cap of $61 trillion for Bitcoin.
Sigel and Bush point to current economic conditions as factors that could drive Bitcoin’s growth.
They cite “enormous economic imbalances, rising distrust in existing institutions and continued deglobalization” as reasons why Bitcoin might gain more prominence in the future.
However, the analysts also note several challenges that Bitcoin must overcome to reach this valuation. One major concern is the energy costs associated with Bitcoin mining.
VanEck suggests that significant innovation will be needed to address this issue. Another potential obstacle is the possibility of a coordinated international effort to ban Bitcoin, which could hinder its growth and adoption.
The report also discusses how Bitcoin’s increasing value and utility could create a feedback loop. As more institutions and investors hold Bitcoin, it could become scarcer in the circulating supply, potentially driving up its price further.
As of August 1, 2024, Bitcoin is trading at $65,309. This is significantly lower than the predicted 2050 value, highlighting the substantial growth VanEck envisions for the cryptocurrency.
VanEck is known for its bullish stance on Bitcoin and is a major issuer of Bitcoin Exchange Traded Funds (ETFs). However, the firm acknowledges that their prediction will only hold if Bitcoin clears several major hurdles.
The report also considers Bitcoin’s future in light of its halving events. By 2050, Bitcoin will have undergone seven more halvings, which will significantly reduce the block reward for miners. This could increase miners’ reliance on transaction fees for revenue.
