Bitcoin is expected to reach $100,000 within the decade
Bitcoin, the world’s largest cryptocurrency by value, could be worth more than gold if its value tops $100,000 as expected in the next five years.
In a research note Goldman Sachs’ co-head of foreign exchange strategy, Zach Pandl, was reported as writing that if Bitcoin’s share of the ‘store of value’ market rose to 50 per cent over the next five years its price would increase to a little more than $100,000.
Goldman Sachs’ Pandl assumed bitcoin would increase in value by between 17 and 18 per cent a year including compound growth; store of value is a term used to describe assets that tend not to depreciate in value, which includes some precious metals such as gold.
Goldman estimated Bitcoin’s market capitalisation at around $700bn. To overtake the value of all gold available for investment it would need to surpass $2.6trn.
Bitcoin, is now worth around $46,000 and it has increased in value by over 4,000 per cent in the last five years but it remains volatile. For example it was valued at $69,000 at one point last November.
Mining Bitcoin remains an environmentally challenging process as most Bitcoin ‘investors’ or miners require super computers that use large amounts of energy to generate the complex mathematical processes which create and secure new bitcoin.
Katharine Wooller, managing director of crypto wealth platform specialist — Dacxi said Bitcoin was already ‘heir apparent’ to gold.
She said: “Like gold the supply is capped and it is easier and cheaper to store.
“Already a plethora of hedge funds, banks and assets managers are purchasing bitcoin as a hedge against future inflation. If only a small percentage of the worlds’ audience switch their use of cold to bitcoin the price will easily sail through $100,000.
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