The next decade could be Bitcoin’s time to copy the gold breakouts of the 1970s, says Capriole Investments.
Bitcoin will copy the gold explosion of the 1970s and become the world’s “strongest asset” by 2024.
This is one of the forecasts in the latest edition of the Capriole Bulletin, a financial circular from research and trading firm Capriole Investments.
Bitcoin will have big moves “and more” in 2020
Despite the fact that the BTC price is almost 80% below its last all-time high, not everyone is pessimistic even about its medium-term prospects.
Although there is still talk of another drop before BTC/USD finds its new macroeconomic bottom, Capriole believes that 2023 will be bright for BTC as a reserve asset.
The reason, he says, lies in the financial history of the world economy of the last century and, in particular, of the United States after the dollar was completely de-anchored from gold in 1971.
Gold, as the world’s leading safe haven at the time, saw “huge” gains over the decade, and fifty years later, it’s Bitcoin’s turn.
“Because gold was so much smaller in the 1970s (and BTC today is even smaller by comparison), it had the capacity to make big moves through a decade of inflation and high-interest rates,” Capriole wrote:
“That’s one reason we think Bitcoin will do the same, and more, this decade.”
When it comes to BTC competing with gold for the safe-haven crown, meanwhile, the potential lies in the numbers – with just 2.5% of gold’s market cap, BTC’s 80% drop from its peak $69,000 last year has little bearing on the big picture.
“Since BTC accounts for just 2.5% of gold’s market capitalization today, its 80% drop adds a mere 2% extra to the combined drop of hard money (gold + Bitcoin),” the bulletin continues.
“Giving a total hard money drop of 24% through November 2022, comparable to the 1970 and 1975 figures for gold.”
Should the stage be already set for a 1970s gold Bitcoin imitation move, the growth potential is therefore even more impressive – even now, the top cryptocurrency’s market capitalization is only 10 % of that of gold before it began its bull run of the time.
“Bitcoin has more growth potential than gold because it is smaller. Similar demand on both assets will result in a 40-fold price change for the cryptocurrency,” Capriole stated.
“The most difficult asset in the world”
Another key argument echoed one long advocated by commentators like Saifedean Ammous in the popular book The Bitcoin Standard.
There, the debate centers on investors shifting towards Bitcoin as its inflation rate falls below that of gold, increasing their monetary “toughness” against the metal:
“There are many other attributes that distinguish cryptocurrency from gold, such as its fair decentralization, its ability to transfer instantly, and its use for micropayments. But the most important thing is that Bitcoin is harder than gold.
This, Capriole added, will confirm Bitcoin as “the hardest asset in the world” in its next block subsidy halving in 2024.
“In total, gold rose 24 times in the 1970s,” Capriole summed up:
“Now imagine the 2020s, where the Fed can’t afford to be as aggressive (debt is much higher today) and we have harder, accessible, digital money: Bitcoin.”
