VanEck model signals $2.9m bitcoin valuation by 2050

Asset manager VanEck has outlined a long-range capital market assumptions model that positions bitcoin as a potential multi-million-dollar asset by 2050, citing structural adoption as a settlement currency and reserve asset as key drivers of value. Under the firm’s base-case scenario, which assumes a compound annual growth rate of around 15 per cent through to mid-century, one bitcoin could be worth approximately $2.9 million, a dramatic elevation from current trading levels.

The analysis, authored by Matthew Sigel, VanEck’s head of digital assets research, and senior investment analyst Patrick Bush, frames the long-term outlook for bitcoin within a context of evolving global financial architecture. It emphasises that adoption as a settlement medium for a meaningful share of international and domestic trade, coupled with partial integration into central bank reserve holdings, would underpin sustained price appreciation over decades.

VanEck’s base-case scenario rests on several assumptions that depart from conventional valuation models used for equities or bonds. The firm posits that by 2050 bitcoin could settle between 5 per cent and 10 per cent of global international trade flows, a share comparable to major national currencies, and around 5 per cent of domestic commerce. Concurrently, central banks could allocate approximately 2.5 per cent of their balance sheets to the asset, reflecting a strategic diversification amid persistent monetary dilution and sovereign debt pressures.

Growth in global money supply and eroding confidence in traditional reserve assets are identified as foundational macro drivers. VanEck’s analysts argue that bitcoin’s fixed supply and decentralised properties could make it attractive as a hedge against currency debasement and inflation, particularly as developed economies grapple with mounting public debt and fiscal imbalances. The firm also highlights the low correlation between bitcoin and traditional asset classes, suggesting potential portfolio diversification benefits.

The valuation model accommodates a broad spectrum of outcomes. In a so-called bear case, where adoption stagnates and regulatory barriers persist, VanEck’s projections place bitcoin’s price near $130 000 by 2050, corresponding to a modest compound annual growth rate of around 2 per cent. Under its most optimistic “hyper-bitcoinisation” scenario, where bitcoin captures a significantly larger share of trade settlement and reserve assets, the price could soar to more than $50 million per coin by 2050, implying a near 29 per cent annualised return.

These scenarios underscore the wide range of potential trajectories embedded in long-term digital asset forecasts, reflecting both the promise and uncertainty inherent in modelling a nascent market that has yet to achieve pervasive institutional and sovereign adoption. VanEck’s analysts stress that their framework is not a guaranteed outcome but rather a set of structural assumptions that outline how different degrees of market penetration and use could influence valuation over an extended horizon.

Market practitioners have taken note of the report’s implications for strategic asset allocation. VanEck suggests that diversified portfolios might consider modest allocations to bitcoin, citing historical data that points to enhanced risk-adjusted returns with small exposures to the digital asset. For investors with higher risk tolerance, allocations of up to 20 per cent have been cited in the firm’s discussion of historical Sharpe ratio optimisation, though such positions carry heightened volatility and drawdown risk.

Regulatory clarity and technological advancements remain significant determinants of future adoption. The long-term model assumes the development of scaling solutions and infrastructure to support bitcoin’s integration into high-volume settlement systems, an area where current limitations persist. Regulatory hurdles in major economies could also constrain institutional participation and broader acceptance, tempering potential growth.