‘Potentially Dramatic’—Bitcoin Could Hit $1.3 Million In This Radical Crypto Price Prediction Scenario

Bitcoin, after soaring to never-before-seen highs last year, has somewhat stalled so far in 2022—though traders are braced for “big surprises” this week.

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The bitcoin price has dropped to under $50,000 per bitcoin, down from highs of almost $70,000 late last year as Russia’s war in Ukraine sent shockwaves through global markets.

Now, one crypto price prediction has forecast a potential bitcoin price of $1.3 million—calling the “upside” for gold and bitcoin “potentially dramatic.”

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“Our emerging markets bond investment team attempted to quantify the emergence of new gold or bitcoin-backed currency regimes,” analysts at investment manager Van Eck wrote in a note this week, pointing to money changing as a result of “sanctions on Russia’s central bank” that eliminated its U.S. dollar, euro and yen reserves.

“The bottom line is that the upside for gold and bitcoin is potentially dramatic. Specifically, the framework estimates gold prices of around $31,000 per ounce and potential Bitcoin prices of around $1.3 million per coin. Adjusting for greater strains on financial and monetary systems generates even higher prices.”

However, the note authors Eric Fine, head of active emerging market debt and Natalia Gurushina, chief economist on emerging markets fixed income strategy at Van Eck, cautioned that “the prices generated in this extreme scenario in which either gold or bitcoin become the reserve asset obviously need to be adjusted downward—they are just a starting point.”

“The upside on crypto seems much higher (around 33x) than that on gold (around 16x), although gold is the more straightforward initial response by central banks in particular,” the analysts wrote. “However, individual actors may be faster to act.”

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Expectations that countries and central banks could begin buying bitcoin and crypto have grown in recent months, first sparked by El Salvador’s bitcoin adoption and then by strict financial sanctions placed on Russia that include it being booted from the global interbank payment network SWIFT and much of its central bank foreign reserves being seized.

In January, Wall Street giant Fidelity predicted other countries and even a central bank could follow El Salvador into bitcoin this year—saying that those who buy bitcoin while the price is low “will be better off competitively than their peers.”

“There is very high stakes game theory at play here, whereby if bitcoin adoption increases, the countries that secure some bitcoin today will be better off competitively than their peers,” Fidelity analysts Chris Kuiper and Jack Neureuter wrote in a note, adding they “wouldn’t be surprised to see other sovereign nation-states acquire bitcoin in 2022 and perhaps even see a central bank make an acquisition.”

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