Eric Fine and Natalia Gurushina said the implied price of BTC would range between USD 1.3 million and USD 4.8 million. The predictions allow formulating a framework to value gold and BTC if one of them becomes a world reserve currency.
Although there are many estimates about Bitcoin, some are more optimistic than others. For example, American investment company VanEck considers that Bitcoin has twice the upside potential of gold and could be worth USD 4.8 million.
Undoubtedly, VanEck has had its sights on the cryptocurrency world for some time. The firm recently filed documents with the US Securities and Exchange Commission (SEC) to launch a new exchange-traded fund (ETF). Since that company would focus on gold and cryptocurrency mining companies, they are also interested in the value of crypto assets in the long term.
VanEck Thinks Bitcoin Can Be Worth a Lot of Money
Eric Fine, head of EM debt at VanEck, and Natalia Gurushina, chief economist, commented on the lofty and optimistic prediction.
The executives compared the price implications of gold and Bitcoin if people adopted either as a store of value. They said that the implied price of BTC would range between USD 1.3 million and USD 4.8 million.
They based the lower prediction on Bitcoin as the monetary base (M0), including the circulating supply of a currency and bank deposits. However, experts and economists do not commonly use that marker.
Meanwhile, their higher prediction came from the evaluation of M2. That measure of the money supply encompasses all bank deposits in a currency and their ability to convert into cash.
The Context in Which the Prediction Occurs
The implications of the conflict between Russia and Ukraine have led to reassessing many economic concepts previously taken for granted. For example, that event has caused Russia to reconsider using alternative currencies due to the number of sanctions it has to face.
They have even evaluated the use of Bitcoin to conduct transactions in the energy sector with China and Turkey. Pavel Zavalny, the chairman of the energy committee of the Russian Duma, said they would accept the lira (TRY), the yuan (CYN), and the crypto asset.
Other Alternatives to the US Dollar and Bitcoin
Experts from VanEck believe that the trend could eventually extend to the central banks of more countries. Both Fine and Gurushina believe the Chinese yuan should be the primary option for a new reserve currency.
The predictions are just the starting points to plan possible future investment strategies. Those scenarios allow investors to formulate a framework to value gold and BTC if one of them becomes a world reserve currency.
BTC is trading at around USD 45,864 and has accumulated a 0,1% loss over the last week. Its daily trading volume is above USD 21.56 billion, and its market capitalization is about USD 871.51 billion, according to CoinGecko.
Bitcoin plays an increasingly relevant role in the economy and might become a world reserve currency. Due to the conflict between Russia and Ukraine, many many consider the idea of using the crypto asset to make cross-border transactions.
By Alexander Salazar
