Bitcoin will continue to take market share from gold as a byproduct of broader adoption of digital assets — and possibly due to Bitcoin-specific scaling solutions — leading to a potential $100,000 price, a Goldman Sachs analyst said in a note. Several other financial experts agree with the bullish view.

                By                    Yaёl Bizouati-Kennedy

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By comparison, Pandl wrote that Bitcoin’s float-adjusted market capitalization is currently just under $700 billion.

“Therefore, Bitcoin currently commands a roughly 20% share of the ‘store of value’ (gold plus Bitcoin) market,” Pandl wrote.

Hypothetically, if Bitcoin’s share of the “store of value” market were to rise to 50% over the next five years (with no growth in overall demand for stores of value) its price would increase to just over $100,000, for a compound annualized return of between 17 and 18%, according to Pandl.

“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 added.

Bitcoin Projected to Continue Rising

Bitcoin, hovering around $48,000 as of Jan.5, reached an all time high of $69,000 in November of 2021.

Bitcoin has seen growth every year since 2018, whereas gold actually lost value in 2021, he said.

“In fact, I believe that Bitcoin could reach a value of $100,000 even faster than the five-year time period the Goldman Sachs team predicted because Bitcoin isn’t just competing with gold as a store of value; it’s also a network with massive network effects and, like tech stocks, grows at an exponential rate,” Elenowitz said.

“Last year alone — a year in which Bitcoin recovered from an attack by China on its mining network — it grew at roughly 75%. That is a great return even during a year when Bitcoin was seen as not growing at its usual, very high rate. In short, Bitcoin is a new and growing kind of asset, and it would be a mistake to put it in the box of being just a store of value.”

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“More and more people around the world are seeing the inherent properties of Bitcoin as being similar to gold, and in fact superior to gold,” Pierce said.

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