Bitcoin (BTC) currently makes up about a 20% share of the total store of value market.
Despite BTC’s flows and ebbs, the crypto might reach $100,000 — according to an analyst at Goldman Sachs Group, it has been steadily driving out gold’s place within the store of value market.
After almost topping $70,000 in Nov., bitcoin has been decreasing in value steadily and dropped by almost 30% in the past month. But as crypto in general gains a broader acceptance, many expect that BTC will continue to soar in the future— in the past five years, it skyrocketed by almost 5,000%.
Goldman Sachs, puts BTC’s float-adjusted market cap at just under $700 billion or 20% of store of value market (assets that increase or remain stable over time). Gold is currently at $2.6 trillion.
The investment company raised the possibility of, within the next five years, BTC making up as much as half of the total store of value market. This will put its value at about $100,000 and a yearly return of between 17% to 18%.
Over the last several decades, the value of gold has been influenced by a lot of different factors. Gold’s price history has gone through some significant ups and downs, and big changes in price might be fueled by such issues as geopolitics, inflation, monetary policy equity markets and more. Gold has decreased 3.6% in 2021 as part of the largest annual drop since 2015 but it has recently been on a rebound with a six-week high. And While gold has long been seen as a much safer investment when compared to crypto, the coming years might start to forge a different path for these two assets.
“Crypto and gold, when you start to think about the two, they have a lot of the same attributes in common,” David Schassler, who is a portfolio manager of the Inflation Allocation ETF, said in a video interview in Nov. “There is a finite supply of coins. There are only 21 million crypto coins that can be made, so you have got this finite supply, just as you do with gold.”
Author: Scott Dowdy