Fund managers at VanEck looked at how this new landscape will impact financial markets and the makeup of reserve currencies as nations look to diversify their holdings.
“The bottom line is that the upside for gold and Bitcoin is potentially dramatic.
‘Stories’about the future of money are interesting, but if one agrees that this is a potentially new paradigm, an attempt at quantification is needed.
VanEck developed its gold and bitcoin price scenarios by comparing current gold reserves with the global money supply: M0 and M2.
It has a lot of money and very little gold,” the analysts said.
Using the same calculations based on global M0 money supply, VanEck sees an extreme Bitcoin price of $1.3 million.
For example, an investor who sees a 10% chance of gold becoming the reserve asset might say that our “extreme scenario” price of $31,000 per ounce represents a practical price target of $3,100 per ounce.