According to the large American asset manager VanEck, there is a chance that bitcoin (BTC) can rise to insane heights in the future. The company states that they believe the price of a single bitcoin could reach $4.8 million. One, not entirely unimportant, condition is that bitcoin must be seen as the global reserve asset and must dethrone the US dollar.
Bitcoin price
This analysis was done yesterday by Eric Fine and Natalia Gurushina of VanEck published† They sought to explore certain implications for the prices of both bitcoin and gold in the event that these assets are widely adopted as reserves around the world.
VanEck’s analysis concluded that the implied price for BTC ranged from $1.3 million to $4.8 million.
One colleague’s view. Interesting analysis. https://t.co/Ua7vTqPU1w
— Jan van Eck (@JanvanEck3) March 31, 2022
Of course, it is anything but certain that bitcoin will indeed be used globally in this way. It is therefore doubtful whether the scenario described here will also take place. However, the purpose of the research was purely to investigate what will happen to the bitcoin price if bitcoin is indeed embraced on such a scale. It is not a prediction for the future.
Bitcoin adoption
We are already seeing the first signs of large-scale adoption by banks and governments around the world. Especially in Russia, due to geopolitical tensions, bitcoin is increasingly seen as an important economic resource. For example, the Russian government indicated a while back that it might wanted to accept bitcoin as payment for their energy exports.
At the moment, the US dollar is still the undisputed global reserve currency of choice, but according to VanEck there is a real chance that the pecking order could be shaken somewhat in the near future. According to VanEck, the Chinese yuan in particular is a possible candidate to take over the dollar’s position.
“The central banks will probably change their reserve mix to the detriment of the dollar (and the euro and the yen) and in favor of something else, to some degree. […] As a result, some central banks – and private actors – will diversify their reserves.”
Bitcoin may be increasingly seen as a worthy alternative. If that happens on a large scale, VanEck predicts fireworks.
The International Monetary Fund (IMF) recently noted that the dollar’s power is dwindling, partly as a result of sanctions imposed on Russia.