-
By
2050,
bitcoin
may
settle
10%
of
international
trade
and
5%
of
local
trade
gain
with
central
banks’
holding
it
as
a
reserve
asset,
asset
manager
VanEck
said
in
a
report. -
Bitcoin
layer-2
networks
will
play
a
key
role
to
overcome
scaling
issues
and
allow
BTC
to
be
used
as
a
medium
of
exchange,
the
firm
said. -
There
are
risks
for
bitcoin’s
growth,
including
rising
power
demand,
concerted
government
crackdowns
and
competition
with
other
digital
assets,
the
report
said.
Under
VanEck’s
assumptions
in
a
Wednesday
report,
bitcoin
would
become
an
essential
part
of
the
international
monetary
system
in
the
next
decades
as
rising
geopolitical
tensions
and
ballooning
debt
servicing
costs
erode
the
current
system.
“As
we
look
at
the
world
right
now,
we
see
enormous
economic
imbalances,
rising
distrust
in
existing
institutions
and
continued
deglobalization,”
Matthew
Sigel,
head
of
digital
asset
research
at
Van
Eck
and
one
of
the
report’s
authors,
said
in
a
Wednesday
interview
on
CNBC.
“We
think
many
of
these
distortions
stem
from
…
a
massive
misallocation
of
capital
since
the
global
financial
crisis
as
G7
governments
have
abused
the
printing
press,
spending
borrowed
money
on
impossible
goals,”
Sigel
explained.
“Bitcoin
…
is
the
ultimate
hedge
against
this
rising
fiscal
recklessness,”
Sigel
said.
In
the
report’s
base
case
scenario,
BTC
would
become
a
key
medium
of
exchange
in
local
and
global
trade,
representing
10%
of
international
trade
settlement
and
5%
of
GDP.
Meanwhile,
it
would
also
gain
as
a
global
reserve
asset
at
the
expense
of
the
four
largest
foreign
reserve
currencies
–
the
U.S.
dollar,
euro,
British
pound
and
Japanese
yen
–
reaching
a
2.5%
weight
in
international
currency
reserves.
:format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/5SE3VHRVUJBZBHXHDGIKJOOIOM.png)
Bitcoin
could
carve
out
a
status
as
reserve
currency
(VanEck)
If
things
play
out
as
VanEck
envisions,
bitcoin’s
price
will
increase
in
value
by
44
times,
gaining
16%
annually
from
its
current
price
of
just
below
$65,000.
Its
market
capitalization
would
soar
to
$61
trillion.
The
proliferation
of
layer-2
networks
will
play
a
key
role
in
overcoming
the
Bitcoin
blockchain’s
bottlenecks
and
scaling
issues
that
prevent
BTC
from
being
a
useful
medium
of
exchange,
the
report
said.
The
sector
could
collectively
be
worth
$7.6
trillion
by
2050,
applying
the
same
valuation
framework
as
for
Ethereum
layer
2s.
VanEck
also
warned
about
potential
risks
ahead
that
could
stifle
bitcoin’s
expansion.
Increasing
energy
demand
by
miners
will
require
innovation,
while
revenue
from
processing
transactions
has
to
grow
dramatically
to
replace
diminishing
mining
rewards
(which
get
cut
in
half
every
four
years
via
halvings)
to
incentivize
miners
to
sustain
the
network.
Concerted
efforts
by
governments
around
the
world
to
restrict
or
outlaw
bitcoin
are
also
a
threat.
Further
risks
highlighted
in
the
report
include
competition
from
other
cryptocurrencies
and
large
financial
institutions
exerting
too
much
control.