Bitcoin to Hit $100K, if Replaces Gold as SOV, Says Goldman Sachs
Bitcoin adoption will continue to take market share from gold and price could reach $100,000, according to analysts at the leading global investment bank, Goldman Sachs.
The analyst noted that if Bitcoin continues to eat into the market share of gold as a “store of value” (SOV) asset, it could rise to the price tag within the next five years.
Goldman estimates that Bitcoin’s float-adjusted market capitalization is just under $700 billion. That accounts for a 20% share of the “store of value” market which it said is comprised of Bitcoin and gold.
It said the value of gold that’s available for investment is estimated at $2.6 trillion.
However, if Bitcoin’s share of the SOV market were to rise by 50% over the next five years, the price of Bitcoin would be in the range of $100,000.
By this estimate, the compound annualized return for Bitcoin would be 17 or 18%, according to Zach Pandl, Goldman Sachs’ co-head of global foreign exchange, interest rates, and emerging markets strategy research.
The research report adds that while the high energy consumption of the Bitcoin network could be a challenge to Bitcoin adoption, it would not stop the demand for Bitcoin as digital gold.
Bitcoin traded around $46,000 in New York, after climbing more than 60% in 2021. The largest digital asset by market value hit a record of almost $69,000 in November. It has surged more than 4,700% since 2016.
Some analysts said, citing market data from the cryptos exchange that Bitcoin has been on a three-year run as the best performing asset class by total returns.
Bitcoin closed 2021 with some 60% gains, while gold recorded a negative return of 4.1%. Total return on Bitcoin has also increased at an annualized rate of 197.2%, while gold has grown at 1.9%.
However, the price of Bitcoin still has some distance to cover if it reaches $100,000 this year. Bitcoin is currently trading at around $46,200, down 0.92% on the day. The current price is about 32.7% down from its all-time high price of approximately $69,000 reached in November last year.
To earn $100,000, Bitcoin has to surge over 70% from current price levels. #Bitcoin to Hit $100K, if Replaces Gold as SOV, Says Goldman Sachs