A prominent investment firm, VanEck, has evaluated the potential of the leading cryptocurrency, Bitcoin, by adding that the BTC has what it takes to replace gold as a global reserve currency.
According to the financial company, Bitcoin can rise to be worth $4.8 million per satoshi if it succeeds in overthrowing fiat as the reserve currency for the world. VanEck added that it is a big call to make for the BTC and sees the Chinese Yuan as a close contender for the role of a global reserve currency.
The team at VanEck also took a step further by comparing the price implications if Bitcoin is adopted as the global reserve currency; the analysis shows that the price of Bitcoin can range from $1.3 million to $4.8 million.
The prediction was made using the M2 assessment tool, which evaluates the money supply, including all deposits with a digital currency and their ability to be converted to ready cash. The assessment revealed that most central banks in the world have little to no gold reserves. Hence, the absence of gold deposits undermines the efficiency of gold in continuing as the reserve currency.
The Russia-Ukraine War and the Growth of Crypto
Following the outbreak of the war, Ukraine has received millions of dollars in donations, with the bulk of the donations coming in cryptocurrency. The total amount of money raised in donations is over $100 million.
Several analysts have believed that the conflict has been a stepping stone to the speedy adoption of Web3 applications on the blockchain network.
Due to the financial restrictions it is currently facing, Russia is exploring the option of embracing an alternative currency, including Bitcoin. The Russian government has identified China and Turkey as friendly allies, and the government is looking into the possibility of transacting oil involving their respective currencies.
Interestingly, experts noted that should Russia succeed with its planned arrangement, other central banks would take a cue and follow suit, undermining the USD as the global reserve currency.
But it is believed that the best bet is the adoption of the Yuan as the new global reserve currency due to the trade dominance of China all over the world.
Halving and the Impacts on Bitcoin
The maximum supply of the BTC token is 21 million, and as of March 31, there were 18.9 million BTC tokens in circulation, getting close to 19 million.
Meanwhile, to control the supply and circulation of Bitcoin, halving is carried out to reduce the supply by half and increase its value in the process.
But, halving is seen as necessary because it does not stimulate the value of Bitcoin to rise, and previous halvings have brought about price declines and subsequent price surges.
If the spike in the price of Bitcoin happens, that is the beginning of its spring which would make further price uptrend a positive.
Bitcoin is currently trading at $46,300 after reaching a high on the last Wednesday of March.