VanEck predicts Bitcoin could reach $2.9 billion by 2050 if this happens

Investment management firm VanEck has outlined a scenario where bitcoin (BTC) could reach $2.9 billion per coin by 2050.

This forecast is based on its “baseline scenario,” which envisions bitcoin becoming a key international medium of exchange and eventually growing to become one of the world’s reserve currencies.

The road to $2.9 million

VanEck’s report presents three different scenarios for the price of bitcoin by 2050. The baseline predicts a price of $2.9 billion per BTC, while a bearish scenario projects a low of $130,314, and a bullish forecast expect the price to rise to $52.4 million.

In this case, VanEck predicts that bitcoin will handle 10% of the world’s international trade and 5% of domestic trade by 2050. The firm predicts that central banks will hold 2.5% of their assets in BTC, with 85% of BTC effectively withdrawn from circulation as investors. look for its store of value properties.

This scenario also predicts a total market capitalization of $61 trillion for Bitcoin, with Layer 2 (L2) solutions such as the Lightning Network collectively worth $7.6 trillion.

According to VanEck’s report, the anticipated erosion of confidence in current reserve assets will play a major role in bitcoin’s rise. This is based on the growing concern for these currencies, fueled by deficit spending and geopolitical developments.

VanEck’s report predicts that BTC will become an important component of the International Monetary System (IMS), potentially replacing traditional reserve currencies such as the US dollar, the euro, the British pound, and the Japanese yen.

The report claims that bitcoin’s immutable monetary policy and decentralized nature could position it as a reliable reserve currency, similar to digital gold. Additionally, emerging Layer 2 solutions such as the Lightning Network are expected to address scalability issues, making bitcoin viable for large-scale international trade.

The report also points to the effect of Gresham’s Law, where rising bitcoin’s value could lead central banks and long-term investors to increase their holdings, thereby reducing the floating supply and further increasing the price.

Challenges and Risks

Despite the optimistic projection, VanEck acknowledges several risks that could hinder bitcoin’s growth. A major concern is the increased energy demand associated with future mining, which could require innovations in chip design and power production. Also, as bitcoin’s inflation rate decreases, transaction fees must become a primary source of income for miners to ensure their sustainable operation.

The report also highlights potential competitive threats from other cryptocurrencies and technological advances. Additionally, coordinated efforts by governments around the world to ban or regulate bitcoin could significantly affect its adoption and value, depending on the regulatory approaches adopted.

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