Published on juli 26, 2024, 12:27 am
Image source: Fox News
- Bitcoin's market capitalization may reach $61 trillion by 2050 driven by demand as collateral and reserve asset.
- VanEck predicts Bitcoin could settle 10% of international trade and 5% of domestic trade globally in the next 30 years.
- Layer-2 technologies could contribute $7.6 trillion, solving scalability issues, boosting Bitcoin's value.
- Bitcoin's rise linked to potential decline in major economies' dominance due to deficit spending, paving way for global Bitcoin acceptance.
- Diminishing utility of euro and yen creates space for broader BTC acceptance in settlements, challenging gold's position as reserve asset.
- 16 Bitcoin Layer-2 projects show promise, including Lightning Network and Stacks, shaping Bitcoin's future functionality.
Bitcoin, the pioneer of cryptocurrencies, might be on a trajectory towards a whopping total market capitalization of $61 trillion by the year 2050. This surge is projected to be driven by substantial demand as Bitcoin gains popularity as collateral for trade settlements and even as a reserve asset for central banks. Investment manager VanEck highlighted in their recent report that there is a likelihood for Bitcoin to be utilized in settling 10% of international trade and 5% of domestic trade globally three decades from now.
VanEck’s report emphasizes the pivotal role of scaling solutions like Bitcoin Layer-2 (L2) technologies, estimating that these Layer 2s could amass a combined value of roughly $7.6 trillion, constituting about 12% of Bitcoin’s total value. The report optimistically asserts that scalability issues hampering widespread adoption may soon be resolved with the emergence of these innovative L2 solutions.
The rise of Bitcoin is anticipated to coincide with a relative decline in economic dominance among major economies such as the United States, European Union, and Japan. VanEck predicts that profligate deficit spending in these regions may erode confidence in their respective currencies over time, fostering global demand for an impartial medium of exchange boasting immutable property rights and a predictable monetary policy — attributes that Bitcoin embodies.
VanEck points out the waning utility of alternative fiat currencies like the euro and Japanese yen in international settlements as an opening for broader acceptance and utilization of BTC. Noteworthy statistics highlight the diminishing shares held by euro and yen in cross-border payments over the years.
While gold has traditionally been revered as a global reserve asset, VanEck points out logistical challenges hindering its resurgence as a standard bearer. In light of risks related to mining, scalability issues, and regulatory uncertainties affecting Bitcoin adoption, hurdles still lie ahead before full realization globally.
Although it remains premature to designate specific winners among Bitcoin Layer-2 solutions at this stage, VanEck identifies 16 projects demonstrating high potential within this realm. Notable contenders include established players like Lightning Network and Stacks striving to enhance Bitcoin’s functionality further on parallel layers.
In conclusion, VanEck’s report envisions an intriguing future where Bitcoin could play an integral role in reshaping financial landscapes globally amidst evolving economic dynamics and shifting sentiments towards traditional fiat currencies.
Original article posted by Fox News
