VanEck's Bitcoin Prediction of $2.9 Million by 2050

VanEck, an asset management company that is among the exciting predictions for cryptocurrency investors, suggested that Bitcoin (BTC) could potentially reach approximately $2.9 million by the year 2050 with a potential value increase in the coming years. The role of Bitcoin in global trade and its potential as a reserve asset for central banks are among the most important factors behind this prediction.

In a new analysis, it is stated that if Bitcoin takes on a more central role in the global financial system rather than just a trading instrument, its price could significantly increase. In VanEck's research note, Matthew Sigel, the head of digital asset research, and senior analyst Patrick Bush, present a valuation model based on Bitcoin’s adoption rate. According to this baseline scenario, Bitcoin’s average annual return could be around 15 percent.

The report highlights two critical use cases: Bitcoin’s potential to be used as a settlement instrument in international trade and the likelihood that central banks will allocate a small portion of their reserves to Bitcoin. VanEck predicts that 5 to 10 percent of international trade volume could eventually occur through Bitcoin. However, it is also emphasized that these assumptions are quite ambitious and that Bitcoin is currently not widely used in global trade.

It is stated that factors such as regulatory clarity, technical infrastructure, and political acceptance are prerequisites for this transformation to occur. VanEck also notes that Bitcoin will likely exhibit high volatility, emphasizing that the annual volatility of such a level of adoption could be between 40 and 70 percent. However, it has been observed that holding between 1 and 3 percent of Bitcoin in portfolios has historically improved the risk-return balance.

The analysis also indicates that Bitcoin price movements are increasingly becoming aligned with global liquidity conditions and that its connection with the US dollar has weakened over time. These developments suggest that Bitcoin could become a more global financial asset in the future. For investors, these points are significant for assessing Bitcoin's long-term potential.