Bitcoin Could Reach $500,000 in This Cycle, Says VanEck Executive

Matthew Sigel, head of digital asset research at VanEck, believes that Bitcoin could reach the $500,000 mark in this bull cycle. At this level, the cryptocurrency would have a market value equivalent to half of the market value of gold.

At the time of writing, Bitcoin is trading in the range of $85,000. Therefore, this means that the cryptocurrency would need to rise about 490% to hit that target.

Earlier this year, the asset manager also published a long-term analysis, indicating that Bitcoin could reach $2.9 million by 2050, presenting a return of 15% per year.

VanEck Compares Bitcoin to Gold

Participating in a conversation with Bitcoin Magazine, published this Saturday (3), Matthew Sigel, an executive at VanEck, made comparisons between Bitcoin and gold, both in portfolios and use cases.

"For institutional investors, much of the question comes down to the level of risk they are willing to take. Bitcoin is about three times more volatile than gold, and many investors with diversified portfolios may consider this when determining the size of their positions, adjusting allocation according to volatility. In this case, perhaps a three-to-one ratio."

Speaking about his own asset management firm, Sigel explains that about 2% of the assets under management at VanEck are in strategies related to digital assets. Still, gold and exposure to mining companies represent about 13% of their assets, having a six-to-one ratio.

Continuing, the executive points out that the movements of physical gold around the world are at an impressive pace, including from the U.S. to the U.K. and from Venezuela to other places, but that this has various costs, such as chartering a Boeing 777 and considering issues like the Strait of Hormuz.

"On the other hand, Bitcoin can be sent at a very low cost. I believe there are advantages in this scenario, and that’s why we are tracking sovereign adoption and the number of countries that are mining Bitcoin. This number continues to increase, reinforcing our conviction in the long-term perspective, over ten years."

Bitcoin Could Reach Half the Market Value of Gold

In another part of the conversation, Matthew Sigel was asked about his price projection for Bitcoin. In response, the VanEck executive again cited gold as a reference.

"What we have discussed for the medium term is for Bitcoin to reach half the market value of gold, which would represent something around $500,000. We expect this to happen in this cycle, but it may be pushed to the next one."

Following that, Sigel also points out that the British pound, Japanese yen, and euro may lose market share due to demographic issues and that someone will eventually absorb that share.

"We developed a model that points to a Bitcoin at $3 million by 2050, if it can capture a significant share of global trade, including energy markets and other sectors. I think there are a variety of possible scenarios. But we use half the market value of gold as a sort of reference because approximately half of the gold is used for monetary purposes, while the other half is for industry and jewelry."

Currently, the market value of gold stands at $29 trillion. Meanwhile, Bitcoin's market value is at $1.7 trillion.

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