The investment bank estimated that Bitcoin’s adjusted market capitalization is slightly less than $ 700 billion, which represents 20% of the market for reserves of value.
Goldman Sachs considered that Bitcoin can reach $100,000 if investors continue to treat it as a safe haven asset just like gold. If the cryptocurrency’s share of the “store of value” market rose to 50% in the next five years, its price could reach that level reaching an annualized return of 18%, the investment bank predicted.
While most banks have been reluctant to use cryptocurrencies, Goldman has always been more optimistic about it. In that framework, he estimated that the adjusted market capitalization of Bitcoin is a little less than the US $ 700,000 million that represents 20% of the market of reserves of value (made up of gold, and now also, Bitcoin ). The value of gold available for investment is estimated at $2.6 trillion.
BTC is currently trading at a price of around $46,000 after appreciating about 60% last year. The largest digital asset by market value hit a record high of nearly $69,000 in November. It rose then, more than 4,700% since 2016, beating gold.
However, the bank assured that the difficulty that the Bitcoin network has is related to institutional adoption but “it will not stop the demand for the asset.” The cryptocurrency leader has long been called “digital gold.” The criticisms made of gold tend to apply to Bitcoin as well: it does not pay interest or dividends and does not mimic the performance of more traditional assets. S us Proponents claim that Bitcoin and gold reserves are high value against inflation.
Gold, for its part, spent 2021 incomings and goings towards $1,800. After a tumultuous start to the pandemic that pushed gold to record highs in 2020, the metal famous for being a hedge against rising prices has failed to capitalize on this year’s scorching inflation. Investors appear to have lost interest, leaving gold to trade in tight ranges for weeks, while holdings of exchange-traded funds shrink.
According to Bloomberg, spot gold is down about 4% this year, on track for its biggest annual decline since 2015. A stronger US dollar and the threat of a withdrawal of stimulus by the world’s major central banks have deterred many investors, who saw better opportunities in rising equity markets. The movements in the price of Bitcoin also captured the interest of investors.
“These opposing factors have caused the bullion to move almost magnetically around $1,800 an ounce. Although this is a historically high price, it will be disappointing for those who enjoyed the rise to the record in 2020,” concluded Bloomberg.
