Van Eck estimates that Bitcoin could reach $43 million by 2049 if the United States created a strategic reserve. This projection relies on the US government purchasing one million BTC, a move that would likely shake up the foundations of the global economy and monetary system.
Van Eck predicts Bitcoin at $43 million
The creation of strategic reserves in Bitcoin has been a subject discussed on the Internet for many years, but it took on a new dimension on Saturday July 27, 2024. On that day, Donald Trump, then candidate for a second term as president of the States -United, announced its intention to constitute a strategic reserve in Bitcoin.
After her speech, Cynthia Lummis, senator from Wyoming, presented the “Bitcoin Act”, a bill aimed at allowing the American government to acquire 1 million BTC in order to repay its national debt.
Although the creation of such a reserve could propel the price of Bitcoin to unimaginable heights, it would go against the original philosophy of Bitcoin: separating currency from state control and promoting the idea of strategic reserves for individuals rather than for governments.
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A recent report from asset manager Van Eckalso issuer of the Van Eck Bitcoin ETF (HODL), the 7th spot Bitcoin ETF in the United States, claims BTC price could see dramatic rise in the years to come if the United States government were to actually create a strategic reserve.
According to the company, the acquisition of 1 million BTC by the United States and the visibility that such an initiative would provide could propel Bitcoin price to $42.3 million by 2049.
Estimation of the evolution of the United States' debt against and the value of its reserve in BTC
Van Eck estimates that U.S. debt will continue to grow by about 5% per year between 2025 and 2049, an increase of $37 trillion. During this time, BTC could see average annual growth of 25%, from around $200,000 to over $42 million.
With such an increase in the price of BTC, its capitalization would reach around $900,000 billion. Van Eck anticipates that the total capitalization of Bitcoin would then represent nearly 18% of global financial assets.
Furthermore, the asset manager highlights that this strategic reserve of one million Bitcoins would be equivalent to nearly 35% of the United States debt.
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Is Van Eck's prediction even feasible?
It is difficult to imagine a world where the capitalization of Bitcoin would reach $900,000 billion. Indeed, the path to such adoption remains strewn with obstacles and challenges, both technical and economic.
First of all, a question arises: what would the price of the dollar be if this prediction came true?
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With such a price in just 25 years, it seems unlikely that the dollar would have been able to maintain its value and inflation stable at 2%.
In reality, Van Eck's prediction does not suggest an increase in the price of Bitcoin to $42.3 million, but rather a drop in the price of the dollar to 2.36 satoshisthe smallest unit of Bitcoin.
Finally, such a high price would also imply a Bitcoin network that is extremely scalable and accessible to everyone. This would require significant expansion of the capabilities of the Lightning Network or other second-layer solutions.
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Source: VanEck
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Investments in cryptocurrencies are risky. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your capacity to lose part of this savings. Do not invest if you are not prepared to lose all or part of your capital
First attracted by the lure of gain, I am now trapped deep into the rabbit hole. With no way out, I just have to share my knowledge and convey the passion I have for Bitcoin. I am also the creator of Adopt a Block, an educational site dedicated to Bitcoin.
Marius Farashi Tasooji
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