VanEck, an American investment firm, claims that Bitcoin has twice the upside of Gold. In addition to their valuation of the cryptocurrency, the firm believes that Bitcoin could be priced at $4.8 million per coin if it became a global reserve asset. Yes, you’ve heard that right! You probably read that and initially thought he can’t be referring to the trading price right?
The firm has a stake in the crypto industry thanks to its Bitcoin Strategy exchange-traded fund which has $30.1 million in net assets. The recent analysis came as researchers Eric Fine and Natalia Gurushina compared the pricing implications of both Gold and Bitcoin in which the latter’s price ranged between $1.3 million and $4.8 million.
The higher estimates were based on a common M2 assessment which is said to be the measurement of the money supply, including bank deposits of a currency and its ability to be converted into cash. Fine and Gurushina leaned towards the M0 monetary prediction of $31k as a reliable origin due to a large number of central banks that lack Gold reserves.
The downside estimates were based on Bitcoin’s status as a monetary base, which is mentioned in the investment database to be the circulating supply of a currency and bank deposits, but it is not a common feature for an economist to introspect.
The current geopolitical affairs have compelled Russia to consider alternate currencies for transactions with Chinese and Turkish partners. This trend could topple the U.S dollar’s dominance. VanEcke analysts suggest using the Chinese Yuan as a contender for a reserve currency, however, there is a probability of nations reshuffling their holdings.
Analysts also advised readers to consider the predictions as mere origin points for investors to develop a framework for valuing gold and Bitcoin if either became a global currency. Alternative finite and infinite equities including emerging markets could serve the same function as Bitcoin or Gold.