Bitcoin’s price could hit $53 million by 2050 as the cryptocurrency is adopted as a settlement currency for global trade, according to VanEck.
The investment firm, which stewards $181 billion in assets, outlined its bullish case for the top digital asset in a note sent to investors on January 8.
“This scenario requires Bitcoin to achieve parity with or surpass gold as a primary global reserve asset, constituting nearly 30% of world financial assets,” Matthew Sigel and Patrick Bush, analysts at VanEck, wrote.
The firm’s bear case predicts Bitcoin hitting $130,000 by 2050, and its base case projects a price of $2.9 million.
VanEck’s forecast highlights how traditional financial firms are increasingly growing more bullish on crypto after years of treating digital assets as an unwanted and seedy subcategory of finance.
It also comes as Bitcoin is showing signs of making a recovery after a wave of liquidations tanked the price and shaved about $1 trillion, or a quarter, off the total cryptocurrency market’s value in October.
VanEck’s bull case
VanEck encouraged investors to allocate up to 3% of their portfolios to Bitcoin.
Their argument is that, while the asset has been volatile, it will grow into its role as a settlement currency for up to 10% of global trade and account for 2.5% of central banks’ balance sheets by 2025.
Under those circumstances, Bitcoin’s price will grow by a compound annual growth rate of 15% to hit $2.9 million by 2025, according to VanEck.
That would be slightly higher than the S&P 500’s CAGR, which is just over 11%.
VanEck’s Bitcoin bull case sees the crypto capture 20% of international trade and make up for 10% of domestic GDP, which would catapult the price to over $53 million — a 58,800% surge from today’s price and representing a CAGR of 29%.
The upshot?
Betting on Bitcoin is safer than not as more countries’ debt skyrocket, VanEck argued.
“As we approach a sovereign debt super-cycle, the cost of zero exposure, effectively shorting a scarce non-sovereign reserve asset, may now rival — or exceed — the volatility of a modest, disciplined allocation,” Sigel and Bush wrote.
