As of January 9, 2022, Bitcoin is valued at $41,816. However, analysis from financial heavyweight Goldman Sachs argues Bitcoin can potentially reach a valuation of $100,000 in the near future.
Goldman released a report on January 4 looking at data on Bitcoin regarding its use as a store of value, in which it compared Bitcoin to gold.
“Bitcoin may have applications beyond simply a ‘store of value’ — and digital asset markets are much bigger than Bitcoin,” the report asserted. “But we think that comparing its market capitalization to gold can help put parameters on plausible outcomes for Bitcoin returns.”
The analysis pointed to Bitcoin gaining a larger share of the “store of value” market. Currently, Bitcoin takes up a 20% share of the store of value market, representing a significant increase from 2020.
The Goldman report argues that if this growth maintains its pace, Bitcoin could easily reach $100,000 within five years.
Goldman’s belief that Bitcoin is replacing gold as a traditional store of value for savings is not unique.
Landon Manning of Nasdaq observed that in October, analysts at JPMorgan released data indicating how Bitcoin has been gaining over more of gold’s market share in the past few months.
Gold’s price generally stagnated throughout the COVID-19 pandemic, while Bitcoin’s price generally surged. For example, in December 2019, Bitcoin was valued at $7,251. So far, in 2022, Bitcoin is valued at $43,107.
Gold is currently at $1,792 per ounce. Towards the end of December 2019, gold was at $1,511 per ounce.
“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 stated.
