In Brief:
- Bitcoin could become more valuable than Gold.
- The cryptocurrency currently has a 20% share of the “store of value” market.
Bitcoin will take market share away from gold in 2022 as digital assets become more widely adopted, Goldman Sachs analyst Zach Pandl said in a research note to clients.
Bitcoin was trading at $46,073 on Wednesday, after struggling to recover from a steep drop in early December. It had reached an all-time high of $69,000 in November. Since 2016, it has increased by more than 4,700%.
According to Goldman Sachs Group, bitcoin will continue to acquire market share from gold as a result of increased use of digital assets, making enthusiasts’ heavily publicized price estimate of $100,000 a possibility.
Goldman Sachs claims that bitcoin has a 20% share of the “store of value” market, citing the cryptocurrency’s $700 billion market capitalization Vs the $2.6 trillion worth of gold held as an investment.
The note further said, “In a hypothetical scenario in which bitcoin grabs a 50% share of this market, its price would reach just over $100,000”.
“Bitcoin may have applications beyond simply a “store of value” – and digital asset markets are much bigger than Bitcoin – but we think that comparing its market capitalization to gold can help put parameters on plausible outcomes for Bitcoin returns,” Pandl wrote.
The term “store of value” refers to assets that retain their value throughout time without deteriorating, such as precious metals and some currencies.
Goldman Sachs picked up its pace with its cryptocurrency trading desk in 2021 and also released its fifth insight named Digital Assets: Beauty Is Not in the Eye of the Beholder to advocate the multiple opportunities developing in the crypto world.
