According to a report (released on March 30) by asset manager VanEck’s emerging markets (EM) bond investment team, “the upside for gold and Bitcoin is potentially dramatic,” and their valuation framework “estimates gold prices of around $31,000 per ounce and potential Bitcoin prices of around $1,300,000 per coin.” Furthermore, “adjusting for greater strains on financial and monetary systems generates even higher prices.”

This blog post (titled: “How One Bond Manager Values Gold and Bitcoin”) was written by Eric Fine, Portfolio Manager, Managing Director, and Head of Active EM Debt and Natalia Gurushina, who is the Chief Economist for EM Managed Debt Funds.

The authors of the report say that if they estimate a “global” price for Bitcoin by dividing M0 (“narrow money”) — which Investopedia defines as “physical money, such as coins and currency, demand deposits, and other liquid assets that are easily accessible to central banks” — by the supply limit of 21 million BTC, they get a potential implied price of $1.3 million per coin in the “extreme scenario” in which Bitcoin has become “the reserve asset.”

However, if they use global M2 — which Investopedia defines as “a measure of the money supply that includes cash, checking deposits, and easily-convertible near money” — they get an implied price of $4.8 million per coin.

They point out that they “need to remind investors to adjust the ‘extreme’ scenario price downward according to their assumptions on the probability of that ‘extreme’ scenario occurring, or on the portion Bitcoin will be fulfilling in any new reserve status.”

As for gold, their lower (based on global M0) and upper (based on global M2) estimates are $31,000 per ounce and $105,000 per ounce respectively.

They go on to say that this framework is meant to serve only as a starting point for valuing gold and Bitcoin:

We can’t emphasize enough that this is a framework that helps us start to get concrete. There are plenty of issues that push these implied prices down. The most obvious is to incorporate a probability of the scenario.

There are other assets that might fulfill the functions of gold or Bitcoin as reserve assets. Real assets such as real estate are another obvious alternative to gold or Bitcoin, which many define as finite in supply. Maybe even infinite-supply assets such as equities perform currency-like functions. Maybe EM currencies do…

We are providing a starting point for any quantification process only. The spirit of our framework is to start a process of quantification, and let you refine your own answer rather than generating ‘the’ answer.


The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

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Featured Image by “WorldSpectrum” via Pixabay