Vaneck research: what imagination does bitcoin have when it becomes a reserve asset?

Wu Shuo blockchain 2022-04-05 10:54:30 阅读数:100

vaneck research imagination bitcoin reserve
In this paper, the imagination of bitcoin becoming a reserve currency is very exaggerated ,“ Use the same as gold M0 value , The implied price of bitcoin is about 130 Thousands of dollars .

author :Eric Fine Natalia Gurushina

compile :Gary Ma Wu said blockchain

Edit Preface :VanEck Previously launched bitcoin Futures ETF, But was rejected bitcoin spot ETF. In this paper, the imagination of bitcoin becoming a reserve currency is very exaggerated ,“ Use the same as gold M0 value , The implied price of bitcoin is about 130 Thousands of dollars . Use global M2 The implied price of bitcoin is 480 Thousands of dollars ”. You can read its basic logic here . Similar arguments can be referred to :Arthur Hayes Long article : Sanction 、 Gold and bitcoin

summary

Sanctions against Russia may have changed the reserve currency system . From this monetary perspective , We are trying to quantify the impact on gold and bitcoin as potential reserve assets .

The currency has changed . Sanctions against the Russian central bank have eliminated its dollar 、 Euro and yen reserves . This should reduce the demand for hard currency as a reserve asset , At the same time, increase the demand for currencies that can play the original functions of these former reserve currencies . We believe the central bank will take action , Private individuals will also take action . To put the current event in context , Our emerging market bond investment team is trying to quantify the emergence of a new gold or bitcoin backed monetary system . The end result is , The upside of gold and bitcoin may be huge . To be specific , The framework estimates that the price of gold is about... Per ounce 31,000 dollar , The potential bitcoin price is about 130 Thousands of dollars . If the greater pressure on the financial and monetary system is adjusted , Will result in higher prices .

From a monetary perspective, the valuation framework of gold and bitcoin

We have established a simple framework to evaluate the value of gold and bitcoin . For gold , We will the global money supply (M0 and M2) Divided by global gold reserves . Monetary liabilities divided by reserve assets . We use troy ounces to represent the current reserves , We use the current exchange rate to convert monetary base liabilities into US dollars . We use base money because econometrics is good ( Worldwide ), It's understandable , It's just currency and demand deposits in your pocket .

except “ The global ” In addition to the price of gold , We also know the gold holdings of central banks , And can calculate the gold price of each country . This may be useful to measure the potential pressure on national monetary and financial systems . for example , Under the strict gold standard , A national central bank's balance sheet should produce about an ounce 1900 Dollar gold . This will show that , The potential pressure from their monetary system is not obvious ( Although there are obviously many other important factors . Besides , We do not recommend adopting the gold standard , We continue to take a negative view of the prices of all Russian assets ). We are right. M2 Run the same operation , Just to enhance the framework ( I'll talk about it in detail later M2 and M3).

For bitcoin , We used the same framework . We calculated BTC Of “ The global ” Price , namely M0 and M2 Divide by quantity . We only calculate BTC The price of , Not the price of all cryptocurrencies , Because the number of bitcoins is limited (2100 ten thousand ), and “ Cryptocurrency ” The potential number of is unlimited . This is the denominator of bitcoin calculation , Just as gold was the denominator in the previous calculation .

Extremes of gold and bitcoin and real price targets

In the extreme case where gold or bitcoin becomes a reserve asset , Obviously, the resulting “ Price ” Lower expectations , They are just a starting point . Investors should at least determine the subjective possibility of the result . perhaps , They should choose a degree for the result : Gold or bitcoin will be the only reserve asset , Or share this position with other assets ?

We believe that , Most investors will and should use the expectation framework to achieve these numbers . for example , One who sees gold has 10% Investors who have a chance to become reserve assets may say , our “ Extreme scenarios ” Price 31000 dollar / Ounces represent 3100 dollar / The actual price target for ounces . They might think , Relative to the current price , This is an attractive upside space , Maybe not .

Our point is , We may never happen , Or extreme situations that may not happen completely begin . However , They are a way to start the quantification process , Investors should adjust according to their own assumptions .

Understand the new monetary paradigm

Some famous commentators said , Due to sanctions against the Russian Central Bank , The currency has changed . But so far , The output is prose , Our goal is a framework and some specific figures .

The Russian central bank may change its reserve portfolio to some extent , To the detriment of the dollar, the euro and the yen , And strengthen other currencies . The United States 、 The sanctions imposed by the eurozone and Japan on the Russian central bank are basically “ disappear ” The Russian dollar 、 Euro and yen reserves . therefore , Some central banks and the private sector will diversify their foreign exchange reserves .

Many of the new reserves will be based only on existing “ emerging market ” National currency , Such as RMB . Relative to the central bank , The private individual role is now the more important price maker in the market . therefore , Gold and cryptocurrency are our primary concerns .

Central banks and individuals may look at... In a new paradigm “ currency ”, We are trying to figure out its exact meaning . let me put it another way , We think it is necessary for market participants to answer such a question : If China buys 3 What happens to trillions of dollars of gold ? If people lose faith in fiat money , Switch to other currencies , What will happen ?

Under the valuation framework , What insights do you have about the price of gold

For gold , Our main conclusion is :

  • In global currency (M0) Divided by global gold reserves, the implied value of gold “ The global ” Price , For the countries with the most gold holdings , Per ounce 3.1 Thousands of dollars ( Average ) and 2.1 Thousands of dollars ( Median ).

  • In global currency (M2) Divided by global gold reserves “ The global ” The price of gold is much higher , About per ounce 10.5 Thousands of dollars ( Part of the reason is that many central banks have little or no gold reserves ).

  • The greater the possibility of a financial crisis ,M2 The more important the price is .

  • M3 It is now implicitly guaranteed by the Federal Reserve ( In our view , This is one of the most important effects of the global financial crisis ), This indicates greater upside space . If the Fed is forced to guarantee the world more openly in future crises M3, Then the gold price will be more optimistic . But as we all know , The Federal Reserve and other institutions stopped counting this figure before and after the global financial crisis , The price is obviously much higher .

  • On the basis of various countries , Japan's data exceeded the record . It has a lot of money , Only a little gold .

  • The UK is another developed market with very low gold reserves relative to currency liabilities .

  • Relative to monetary liabilities , China's gold reserves also seem to be low .

  • The results of gold prices in various countries may indicate , Countries with high gold prices may face pressure of currency devaluation .

  • In some developed market countries , There is a lot of pressure to devalue , More than emerging market countries . Developed market countries “ print ” Own reserve currency , therefore ,“ reserve ” It's a different concept for developed markets , Emerging markets must strive to generate external account surpluses , To increase reserves .

  • Russia is really interesting . Relative to money ( Under the current exchange rate and gold price ), It has almost enough gold to build a currency board .1999 year , stay 1998 After the crisis in , When Russia's foreign exchange reserves ( in the past , Russia's foreign exchange reserves are US dollars ) When equal to the base currency , The opportunity to buy appears .

  • Of course , We need to remind investors , According to their understanding of this “ extreme ” Assumptions about the likelihood of a scenario happening , Or the assumption of the proportion of gold realized in any new reserve state , Down this “ extreme ” Price expectation under scenario .

For those who pay attention to the calculation of gold prices in various countries , There is a big difference in prices . The following evidence should be self-evident .

Under the valuation framework , What insights do you have about bitcoin prices

Cryptocurrencies all benefit from this situation , And compete with gold . Maybe cryptocurrency is the new gold , And will benefit from this demand for new hard money . Maybe not. , Maybe both . Our current view is , For the central bank , Gold is the easiest thing to consider and buy , At this special moment , The central bank is the key role in our hearts . But private actors are more agile , Respond to the same underlying motivation .

We did the same calculation for cryptocurrency . Because the potential number of cryptocurrencies is unlimited , We focus on bitcoin , It has 2100 Restrictions on the supply of 10000 bitcoins . In this regard , It is closer to gold than other cryptocurrencies . that , The global M0 and M2 Divided by the number of bitcoins ?

  • Use the same as gold M0 value , The implied price of bitcoin is about 130 Thousands of dollars .

  • Use global M2 The implied price of bitcoin is 480 Thousands of dollars .

  • The upside of cryptocurrency seems to be much higher than that of gold ( about 33 times ), Although gold is the central bank's more direct first choice . However , Individual participants may act faster .

  • Like gold , We need to remind investors , According to their understanding of “ extreme ” The assumption of the probability of occurrence , Or the assumption that the bitcoin will be realized in any new reserve state , Down regulation “ extreme ” Price expectation in case .

The starting point framework for the valuation of gold and bitcoin

We cannot overemphasize , This is a framework that helps us begin to concretize . There are many problems with these implied prices j Come down . The most obvious thing is to include a probabilistic scheme .

There are other assets that may perform the functions of gold or bitcoin , As a reserve asset . Physical assets such as real estate are another obvious alternative to gold or bitcoin , Many people define it as limited supply . Maybe even an unlimited supply of assets , Like stocks , It can also play a function similar to money . Perhaps the same is true for emerging market currencies ( More on ).

We just provide a starting point for any quantitative process . The spirit of our framework is to start a quantitative process , Let you refine your answers , Instead of producing " answer ".

Emerging market currencies / Bonds may benefit

Emerging market currencies (EMFX) And a potential beneficiary . However , The above framework is not suitable for EMFX, So we won't include them in this discussion .

First , Unlike gold or bitcoin , Emerging market currencies are subject to potentially unlimited supply . Besides , We have a formal investment process for local currency bonds in emerging markets . and , This process does not distinguish between money and interest rates . Logically speaking , Separating money from interest rates is double counting inflation ( Unless you're looking at non economic factors , Such as technical factors ). Relative to the fundamentals , We are attracted by high real interest rates . period . This is the core of our formal analysis process . We have the second step of analysis , To include non systemic risks . for example , We don't have Russia at all , Because although relative to its fundamentals , Real interest rates are attractive , But we think the risk of sanctions is too high , The impact is too great . in any case , We think EMFX Is a potential major beneficiary , But we didn't discuss it here , Because this framework is not suitable for unlimited supply of assets .

Quantify the impact on gold and bitcoin prices

up to now , The world has not imposed sanctions on major economic and financial participants such as Russia . About the future of money “ The story ” Very interesting , But if someone thinks this may be a new paradigm , Then it is necessary to try to quantify . This is the purpose of our work -, Make a vague and complex problem as specific as possible . The key impact of this major change on asset prices is the sharp rise in gold and bitcoin .

original text :https://www.vaneck.com/us/en/blogs/emerging-markets-bonds/how-one-bond-manager-values-gold-and-bitcoin/

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