Bitcoin as a reserve asset? VanEck’s Matthew Sigel predicts $3 million price target by 2050

Matthew Sigel, head of digital assets research at VanEck, has projected that Bitcoin could reach a value of $3 million by 2050. In his analysis, he predicted that Bitcoin would become a reserve asset, owned by central banks with a 2% share to strengthen the global economic system.

During his recent interview on CNBC, Sigel revealed that his price target is based on a conservative model. According to Sigel’s projection, the rate of growth is likely to be 16% per year over the next few decades. He believes that this growth path is plausible due to the position of Bitcoin as an inflation-proof asset, which may come into its own as the world economy changes.

“That sounds extreme,” Sigel said, “but that’s a 16% compound annual growth rate for a couple of decades…so into the millions over the medium term is a high conviction call.”

Sigel noted that traditionally, Bitcoin has always done relatively well during periods of heightened market volatility, including the electoral process. Similarly, the performance of Bitcoin in 2020 also demonstrated low volatility before the election and then a rise in value. If the pattern is to be followed, Sigel anticipates a significant new wave of buyers in the days after the election as the price of Bitcoin rises.

BRICS expansion could catalyze global Bitcoin adoption

When analyzing the global positioning of Bitcoin, Sigel pointed out the limited number of coins which is 21 million, a factor that many people believe makes it a good store of value against currency depreciation. Sigel noted that with the recent addition of Argentina, UAE, and Ethiopia to the BRICS countries, there was a growing interest in Bitcoin as a dollar substitute in emerging markets.

Member countries of the BRICS have been looking for ways to trade, with Bitcoin coming up as an option. For instance, Russia is using its sovereign wealth fund to invest in regional projects that can include Bitcoin mining and AI infrastructure and is planning to use Bitcoin for some part of the trade settlements. 

Sigel further stated, “So there is tremendous urgency outside of the US to find a way to circumvent the irresponsible fiscal policy that we’ve been running here in the US.”

Sigel also served a word of caution to the United States, noting that if the country fails to embrace these dynamics, then it may risk losing influence in the global financial system. In the case where the BRICS countries are to solidify the usage of Bitcoin as a reserve asset, the U.S. may experience a strategic threat in the long term.

In response to a question on the possible future price of Bitcoin, Sigel remained hopeful, citing historical rally data. The least rally from the bottom to the peak for Bitcoin was about 2000%. Even a 1,000% gain would bring Bitcoin’s price to nearly $180,000. He believes the post-election environment could be the biggest driver for Bitcoin in the near future, and the cryptocurrency may surge to highs of $200,000 in the future cycles.