Investment manager VanEck has released a report projecting Bitcoin’s market capitalization could soar to $61 trillion by 2050, equating to roughly $2.9 million per coin. This forecast is based on the anticipated high demand for Bitcoin as collateral for trade settlements and a reserve asset for central banks.
As per the report, VanEck said that Bitcoin will settle 10% of all foreign commerce and 5% of all domestic trade by 2050. Additionally, they forecast that 2.5% or so of central banks’ assets may be held in Bitcoin.
According to VanEck, Bitcoin layer 2s (L2s), or scaling solutions for the blockchain network, may be worth a total of $7.6 trillion, or around 12% of Bitcoin’s market capitalization.
Crucially, the paper states that “emerging Bitcoin Layer-2 (L2) solutions will resolve Bitcoin’s scalability issues, which have been the primary barrier to its widespread adoption.”
According to the research, a downturn in major economies such as the United States, the European Union, and Japan, along with a decrease in the value of their respective currencies as a result of excessive deficit spending, might have an impact on the ascent of Bitcoin. This move may increase demand for Bitcoin as a reliable, impartial medium of trade on a global scale.
As per the report, “In this environment of uncertainty, businesses and consumers worldwide are likely to recognize the endemic flaws of alternative fiat currencies, thereby generating demand for a neutral medium of exchange with immutable property rights and predictable monetary policy. This is where Bitcoin comes in.”
VanEck highlights the shrinking use of the euro and yen in international payments as a chance for Bitcoin’s growth. The euro’s share has dropped from 22% to 14.5% since the mid-2000s, while the yen’s share fell from 6.2% to 5.4%.
The report predicts ongoing fiscal mismanagement and declining property rights in major economies could lead to a shift away from fiat currencies. VanEck notes mining, scalability, and regulatory issues as potential risks to Bitcoin’s adoption.
VanEck lists 16 “high potential” initiatives, including Stacks and Lightning Network, but thinks it’s too early to identify victors among the Bitcoin L2s.
Also Read: VanEck Files S-1 for Ethereum ETF with SEC, Eyes Launch Soon
