US investment firm VanEck believes that Bitcoin (BTC) has twice the upside potential of gold and could be worth as much as $4.8 million per coin if it becomes a global reserve asset.

Of course, this is important, and VanEck believes the Chinese yuan is a more potential competitor.

The high valuation of BTC was made in an editorial Thursday written by VanEck’s Head of Active Debt Emerging Markets Eric Fine and Chief Economist Natalia Goroshina, who attempted to compare the implications for gold and bitcoin prices if either was viewed as support. global currency. Techniques.

VanEck analysis showed that the implied price of BTC ranged from $1.3 million to $4.8 million. The lower forecast was based on BTC as base money (M0), which according to the investment database Investopedia includes all currency working capital and bank deposits, but it is not a common sign that economists look at.

The higher projections were made based on the most popular estimate of M2, which Investopedia considers a measure of the money supply that includes all bank deposits in a currency and its ability to convert into cash.

In their gold ounce estimate, Fine and Gurushina leaned more toward the 31,000 M0 price forecast as a reliable starting point because “too many central banks have little or no gold in reserve.” The lack of deposits skews the M2 forecast towards $105,000 an ounce of gold much higher and less reliable.

The recent geopolitical turmoil has already led Russia to consider using different currencies, including bitcoin, for oil transactions with its “friendly” partners China and Turkey.

This trend may spread to the central banks of many countries, and the dominance of the US dollar is likely to be affected. Fine and Goroshina believe that the Chinese yuan should be considered the best forecast for a new reserve currency, but that countries are likely to restructure their assets anyway.

“Central banks are likely to change the composition of their reserves at the expense of the dollar (as well as the euro and the yen) and in favor of something else, to varying degrees […] As a result, some central banks – and private entities – are diversifying their reserves.” .
Analysts urged readers to remember that the outlook is only a starting point for investors to formulate a framework for how to price gold and BTC as a last resort or become a global currency. He noted that there are options like restricted real estate, endless stocks, and even emerging market currencies that can do the job of gold or bitcoin.

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VanEck holds a stake in the cryptocurrency industry through its Bitcoin Strategic Traded Fund (ETF), a Bitcoin futures exchange-traded fund (ETF) with $30.1 million in total net assets. The company also recently filed with the Securities and Exchange Commission (SEC) to launch a new ETF targeting gold and cryptocurrency companies.

Source: CoinTelegraph