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Investment management firm VanEck redefined the structural investment case for Bitcoin in a report released Thursday, arguing that in an era of expanding G7 sovereign debt, the mathematical risk of holding zero exposure to the asset now outweighs the risks associated with its historical price fluctuations.
Key Points
- VanEck argued Thursday that the risk of holding zero Bitcoin now mathematically outweighs its volatility.
- The firmās base model projects a $2.9 million price by 2050, driven by central banks adopting 2.5% reserves.
- Analysts state a 1ā3% allocation maximizes the Sharpe Ratio in standard equity-bond portfolios.
The capital markets analysis, led by Head of Digital Assets Research Matthew Sigel, posits that Bitcoin is transitioning from a speculative vehicle to a necessary form of non-sovereign portfolio insurance. Under the firmās base-case modeling, this shift is projected to drive the assetās price to $2.9 million by 2050, representing a compound annual growth rate (CAGR) of 15% over the next quarter-century.
“The risk of zero exposure to the most established non-sovereign reserve asset may now exceed the volatility risk of the position itself,” the researchers noted, citing the deteriorating fiscal health of developed markets.
Portfolio Mathematics and Sharpe Ratio
VanEckās recommendation rests on quantitative simulations regarding portfolio efficiency. The firm found that integrating Bitcoin into a standard 60/40 equity-bond portfolio improves risk-adjusted returns.
According to the data, a modest allocation of 1% to 3% historically maximizes the Sharpe Ratio, which a measure of excess return per unit of risk. This optimization is driven by Bitcoinās “convex return” profile and its historically low correlation to U.S. treasuries and the dollar.
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While the analysis noted that allocations as high as 20% have optimized total performance for high-risk portfolios, the firm maintained a standard advisory recommendation of 1ā3%.
Central Bank Diversification
The reportās valuation model assumes a structural change in global reserve management. VanEck anticipates that central banks will eventually diversify approximately 2.5% of their balance sheets into Bitcoin to hedge against fiat debasement.
Additionally, the model projects the asset will settle between 5% and 10% of international trade.
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Divergent Scenarios and Market Cycle
While the base target sits at $2.9 million, the report outlined extreme variances based on adoption velocity:
- Bear Case ($130,000): If Bitcoin fails to gain traction as a trade settlement layer, growing at only 2% annually.
- Bull Case ($53.4 million): A “Hyper-Bitcoinization” scenario where the asset captures 20% of global trade and 10% of domestic GDP.
Assessing the immediate market structure, VanEck characterized the current environment as “mid-cycle.” The firm cited a Relative Unrealized Profit (RUP) reading of 0.43 as of Dec. 31, 2025, and moderate futures funding rates of 4.9%, suggesting the asset has room to appreciate before reaching a cyclical peak.
Bitcoin changed hands at $90,398.99 as of 7:09 a.m. ET Friday, posting a daily gain of 0.21%, according to data from CoinMarketCap.
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YONA GUSHIKEN
Yona brings a decade of experience covering gaming, tech, and blockchain news. As one of the few women in crypto journalism, her mission is to demystify complex technical subjects for a wider audience. Her work blends professional insight with engaging narratives, aiming to educate and entertain.
