By Landon Manning
Although the dollar valuation of Bitcoin (BTC) hit some hiccups at the beginning of 2022, analysis from legacy finance titan Goldman Sachs has claimed that, by taking over gold’s role as a store of value, Bitcoin can reach a valuation of $100,000 in the not-so-distant future.
In a report released on January 4, data analysts from the bank looked at data on Bitcoin from a key angle: its use as a store of value, especially in comparison to gold.
“Bitcoin may have applications beyond simply a ‘store of value’ — and digital asset markets are much bigger than Bitcoin,” the report claimed. “But we think that comparing its market capitalization to gold can help put parameters on plausible outcomes for Bitcoin returns.”
Specifically, the analysts noted that Bitcoin has gained a bigger and bigger share of the “store of value” market, currently sitting at 20%, up from a negligible presence even in 2020, and that if this growth continues at a steady rate, Bitcoin’s valuation will easily hit the $100,000 mark in five years or less.
The belief that Bitcoin is, in the public’s opinion, replacing the historically-reliable role of gold as the best store of value for savings is hardly unfounded or unique to Goldman Sachs. Just last October, for example, JPMorgan analysts published data showing how Bitcoin is taking over more of gold’s market share in recent months, with the price stagnating somewhat during the pandemic while Bitcoin’s skyrocketed. All that will need to happen, according to Goldman Sachs, is for this trend to continue at a reasonable rate, and Bitcoin’s $100,000 valuation will follow.
Even as the world of Bitcoin encounters hardships, such as difficulties in mining operations or regulatory hostility worldwide, trends like this show how Bitcoin has reached a level of popularity that can give it real staying power.
“We think that comparing its market capitalization to gold can help put parameters on plausible outcomes for Bitcoin returns,” Goldman Sachs’ Co-Head of Global Foreign Exchange, Rates and Emerging Market Strategy Zach Pandl said, adding that, “we think that comparing its market capitalization to gold can help put parameters on plausible outcomes for Bitcoin returns.”
As Bitcoin has had its mettle tested during recent economic chaos, it seems clearer than ever that the long-term trend will only point upwards, despite any temporary price setbacks.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
