Bitcoin Could Hit $1.3 million: VanEck’s Radical Crypto Price Prediction

The price of Bitcoin has gone down this year after reaching all-time highs of almost $70,000 last year. This month the price of Bitcoin dropped below $50,000 for the first time since December 2021. Amidst this, a recent report by Van Eck Associates Corporation says that Bitcoin could surge up to $1.3 million while gold may reach $31,000 per ounce if these assets become the sole reserve assets across the world. This dramatic prediction comes in the light of the Russian invasion of Ukraine and the sanctions imposed by the major economies in the West. 

The report says that since the US and other western countries are freezing US dollars, Euros, and the Chinese Yuan, the demand for hard currencies as reserve assets will go down while digital currencies and gold may step up to function as reserve assets. The predicted prices may go higher depending on financial constraints and monetary systems. The report says that either gold or digital currencies may become the world’s reserve asset. The increase in prices for cryptocurrencies is much higher (almost 33X) than gold (around 16X), although it depends on how central banks respond. Both are extreme case scenarios, and thus, the prices have to be adjusted downward. 

The mainstream adoption of cryptocurrencies is going upward in light of recent events related to cryptocurrencies. Firstly, the adoption of Bitcoin as a legal tender by El Salvador has made other countries confident to also start exploring the potential of digital assets. Furthermore, central banks in different countries have shown interest in cryptocurrencies due to strict financial sanctions against Russia that have removed Russia from the SWIFT payment network and froze most of its foreign reserves. Earlier in January, Wall Street giant Fidelity predicted that several countries could follow El Salvador’s footsteps in adopting and buying Bitcoin. It advised governments to purchase Bitcoin when its prices are low to stay ahead of their competitors. It suggested that if Bitcoin adoption increases, countries that have more Bitcoin will do better than others in the international market. Fidelity indicated that it would not be surprised if central banks started acquiring Bitcoin. 

Has Bitcoin Reached All-Time Highs Already?

Last year in November, Bitcoin recorded an all-time high of $68,789. Bitcoin advocates and supporters began thinking that Bitcoin prices would go up, reaching up to $100,000. That did not happen, and the prices of Bitcoin kept going down. However, this does not mean that Bitcoin has reached its all-time high. In fact, crypto experts and enthusiasts believe that the price of Bitcoin will keep going up. This is because several countries are looking to adopt Bitcoin as a legal tender; some are making comprehensive regulatory frameworks for the crypto industry. This suggests that mainstream crypto adoption is right on the horizon. Several countries, including Russia, the USA, and Europe, are exploring the possibility of their own central bank-backed digital assets. 

The recent geopolitical tensions in the world (the Russia-Ukraine crisis) have provided an essential lesson to central banks worldwide - their currency is not safe from Washington and Brussels. Many crypto company founders are already warning countries that their reserves are not secure. Their money can be frozen at any moment by the West. They are suggesting that central banks should consider shifting their sovereign forex reserves into sovereign assets like digital currencies that are decentralized and free from any influence of any country. In such cases, cryptocurrencies are the most liquid option. Mexico is already on the list of countries that are expected to follow El Salvador’s footsteps in adopting Bitcoin in some way. Samson Mow, the advisor for Bitcoin adoption in El Salvador, went to Twitter to announce that he is working with Mexico senator Indira Kempis to make Bitcoin legal tender in the country. Such a move will reduce the dependence of Mexico on US dollars - allowing it to strengthen its own economy. 

Can Crypto be Attacked?

Like any other asset, Crypto is not invincible in the face of continuous attacks and pressures by central authorities. Recently, Coinbase seized around 25,000 Russian accounts banning the account holders from accessing their funds. This move came after it was pressured by US regulators to monitor Russian accounts. Similarly, Justin Trudeau blocked the Bitcoin addresses of some activists in the trucker protests in Ottawa. However, tech-savvy crypto owners found ways around the ban.

Additionally, the US introduced a bill called Accountability for Cryptocurrency in El Salvador Act, in which it said that Bitcoin adoption by El Salvador could cause a potential risk to the US financial systems. It asked for an analysis of El Salvador’s adoption of Bitcoin and the dangers it poses to cybersecurity, democratic governance, and economic stability of El Salvador. They also need to provide a plan to mitigate the risks of cryptocurrencies to the US financial system. El Salvador did not have its own currency since 2001, and by doing this, the US government is interfering with a sovereign country’s right to decide its own currency. 

Despite the recent attacks from various governments, Bitcoin is a decentralized currency, and no government owns it. It can freeze people’s wallets by controlling major exchanges, but it cannot stop people from using cryptocurrencies. If an exchange comes under attack, people will likely switch to another that is not on the government’s radar. The number of Bitcoins in circulation is reducing every month, and the decrease in supply might just shoot up demand and price. Crypto experts say that the price of Bitcoin may skyrocket soon as the geopolitical situation stabilizes. Countries will turn to cryptocurrencies either because of war, inflation, or political instability. This is especially true for Latin American and Eastern European countries that are highly distressed because of the dollar-dominated financial systems. These countries might ease the regulatory hurdles to adopting Bitcoin. This move might just provide the necessary push for cryptocurrencies to reach mainstream adoption. 

Author Bio

Ian Kane is the Co-Founder at Unbanked, a global fin-tech platform built on blockchain. Kane has worked in technology & digital media for over 10 years with a heavy focus on business development, sales, and strategy. His diverse professional background enables him to bring unique insight and experience to every challenge he takes on.