Van Eck, a leading American investment corporation, has predicted a more than 100x increase in the world’s biggest cryptocurrency price. The firm’s investigation employed a variety of models to arrive at the result considered one of the most accurate forecasts of Bitcoin prices.
Up to $4 Million For A Single Bitcoin
At the end of March, Van Eck Associates Corporation published a post titled “How One Bond Manager Values Gold and Bitcoin” in which they made dazzling predictions about the prospects of the digital assets. According to Eric Fine, the Head of Active EM Debt, and Natalia Gurushina, the Chief Economist of the firm, the price of a single Bitcoin might reach up to $4.8 million.
Their prediction was predicated on Ukraine’s war and sanctions against Russia, which had diminished demand for hard currencies as reserve assets. VanEck envisioned a future in which Bitcoin or gold superseded the dollar as the world’s reserve currency.
They drew this conclusion after using the M2 framework to value Bitcoin if it becomes the world’s reserve currency. “We calculate the global price for BTC, namely M0 (and M2) divided by BTC, globally. But the concept is the same: The money liability divided by the reserve, or potential reserve asset” VanEck’s executives.
They acknowledged that they began their hypotheses with unlikely possibilities that may or may not occur entirely. They stated that if gold and Bitcoin do not succeed in assuming the role of reserve money, national currencies such as the Chinese yuan might become the world’s next reserve currency.
The Critics’ Viewpoints Towards BTC Future
M0/M1 is understood as narrow money by VanEck and is used to determine the money supply in an economy. M1 is often seen as very liquid and readily accessible, while M2 is regarded as wide and has poor liquidity. Using the MO framework, the value of 1 BTC places Bitcoin at $1,300,000 for each asset, whereas M2 values it at $4,800,000 per coin.
One colleague’s view. Interesting analysis. https://t.co/Ua7vTqPU1w
— Jan van Eck (@JanvanEck3) March 31, 2022
Some Bitcoin critics have identified weaknesses in the premise that the digital asset would eventually become the world’s reserve currency. James Bullard, president of the Federal Reserve Bank of St. Louis, said that Bitcoin does not represent a danger to the dollar due to the historical aversion to trading multiple currencies.
“I just think for Fed policy, it’s going to be a dollar economy as far as the eye can see – a dollar global economy really as far as the eye can see – and whether the gold price goes up or down, or the bitcoin price goes up or down, doesn’t really affect that,” Bullard said to CNBC.