“Could Bitcoin Reach $2.9 Million by 2050”?

Asset manager VanEck, an issuer of spot bitcoin (BTC) and ether (ETH) ETFs, says the BTC price could reach $2.9 million by 2050.

Bitcoin will become a major part of the international monetary system in the next decade as rising geopolitical tensions and debt servicing costs erode the current system, VanEck hypothesizes in the report released Wednesday.

“As we look around the world right now, we see huge economic imbalances, increasing distrust of existing institutions, and continued globalization,” said Matthew Sigel, head of digital asset research at VanEck and one of the authors of the report.

“Many of these distortions are due to the massive misallocation of capital since the global financial crisis, as G7 governments misused the printing press and spent borrowed money on impossible targets.”

“Bitcoin is the ultimate hedge against this rising financial recklessness.”

In the report’s baseline scenario, BTC will become a major medium of exchange in local and global trade, representing 10% of international trade settlement and 5% of GDP.

It will be a global reserve asset based on the largest foreign reserve currencies—the US dollar, euro, British pound and Japanese yen—and will reach a weight of 2.5% in international currency reserves.

If things go as VanEck predicts, bitcoin’s price will increase 44-fold, gaining 16% annually from its current price of just under $65,000, while its market cap will rise to $61 trillion.

The report noted that layer-2 networks will play a key role in overcoming the bottlenecks in the Bitcoin blockchain and the scaling issues that prevent BTC from becoming a significant medium of exchange. By implementing the same procedures as Ethereum layer-2s, the sector could reach a value of $7.6 trillion by 2050.

VanEck also warned about potential risks that could hinder Bitcoin’s growth.

According to the report, the increasing energy demand by miners requires major innovation and the need for increased transaction revenues to incentivize miners, replacing mining rewards that are halved every four years with the Bitcoin halving. Efforts by governments around the world to restrict or ban Bitcoin also pose a major threat.

Other risks highlighted in the report include competition from other cryptocurrencies and large financial institutions imposing too many restrictions.