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Multinational investment bank Goldman Sachs said in an investor note that Bitcoin could easily reach $100,000 if investors replaced gold with Bitcoin as a “store of value”, Bloomberg reported Tuesday.
Goldman Sachs expects Bitcoin to gain gold’s market share due to the widespread adoption of digital assets. Gold, which has largely been touted as a means of storing value, saw a drop of 5% compared to Bitcoin’s rise by more than 70% in 2021.
The banking giant predicted the price after calculating the market capitalization after adjusting the floating-point numbers. A floating point refers to the quantity of a particular asset in the market.
At press time, the market capitalization of Bitcoin was about 870 billion dollars. However, Goldman Sachs estimates that Bitcoin has a market capitalization of less than $ 700 billion, taking into account the actual quantity on the market. On the other hand, the market capitalization of gold is set at $2.6 trillion.
“Bitcoin currently commands a roughly 20% share of the “store of value” (gold plus Bitcoin) market,” analysts wrote in the note. “We think that Bitcoin’s market share will most likely rise over time as a byproduct of broader adoption of digital assets.”
“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.”
At the time of writing, Bitcoin was trading around $46,286.51 on Wednesday, with a 24-hour
price change of -1.05%. The currency also hit an All-Time High of $68,789 in November.
Goldman Sachs pointed out that there may be use cases other than value storage as a factor for increasing Bitcoin’s share. It noted:
“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.”
Goldman Sachs predicts Bitcoin to reach $100K by replacing gold appeared first on Our Bitcoin News.