VanEck said that as the cryptocurrency is used as a settlement currency for global trade, the price of Bitcoin could reach $53 million by 2050.
The investment firm, which manages $181 billion in assets, outlined its bullish case for the top digital asset in a note sent to investors on January 8.
VanEck analysts Matthew Sigel and Patrick Bush wrote: “This scenario calls for Bitcoin to become a major global reserve asset on par with or surpass gold, accounting for nearly 30% of global financial assets.”
The company’s pessimistic case predicts that Bitcoin will reach $130,000 by 2050, and its base case projects a price of $2.9 million.
VanEck’s forecast underscores how traditional financial firms are increasingly bullish on cryptocurrencies after years of dismissing digital assets as an unpopular and dirty subcategory of finance.
Meanwhile, Bitcoin is showing signs of recovery after a wave of liquidations in October sent its price tumbling and wiped about $1 trillion, or a quarter, off the total value of the cryptocurrency market.
VanEck encourages investors to allocate 3% of their portfolios to Bitcoin.
Their argument is that while the asset has been volatile, by 2025 it will gradually become the settlement currency for 10% of global trade and account for 2.5% of central bank balance sheets.
VanEck said that in this scenario, the price of Bitcoin would grow at a compound annual growth rate of 15%, reaching $2.9 million by 2025.
This would be slightly higher than the S&P 500’s CAGR of just over 11%.
VanEck’s bull case for Bitcoin posits that the cryptocurrency accounts for 20% of international trade and 10% of domestic GDP, which would send the price of Bitcoin to over $53 million—a 58,800% surge from current prices and a compound annual growth rate of 29%.
The result?
Van Eyck believes that as more and more countries’ debts soar, betting on Bitcoin is safer than not betting.
“As we approach a sovereign debt supercycle, the cost of zero exposure, effectively shorting scarce non-sovereign reserve assets, may now rival or even exceed the volatility of modest, disciplined allocations,” Siegel and Bush wrote.
Eric Johansson is the managing editor of DL News. Any tips? Send him an email at eric@dlnews.com.