Goldman Sachs says Bitcoin could reach $100k, compete with gold as 'store of value'

• Goldman Sachs expects Bitcoin to take more market share from gold

• Bitcoin topped the firm’s 2021 return scorecard with over 60% yearly returns, whereas gold is at the bottom with a 4% yearly loss

Bitcoin will snag away market share from gold in 2022, as the digital currency has become more widely adopted, Goldman Sachs co-head of foreign exchange strategy Zach Pandl said in a research note to clients.

Goldman estimated that the public holds gold worth around $2.6 trillion for investment purposes and compared it with Bitcoin’s market value of $700 billion.

Pandl wrote, estimating both the values of gold and the digital asset, Bitcoin currently has an approximate 20% share of the “store of value” market.

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The term “store of value” describes assets that can maintain their value over time without depreciation.

The bank estimated the float-adjusted market cap of Bitcoin, however, the current market capitalization of BTC is close to $884 billion.

Forecast for Bitcoin

Bitcoin will “most likely” become considerably bigger in proportion over time, the U.S. investment bank said, in a list of 2022 predictions.

“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, for a compound annualized return of 17-18% (accounting for growth in Bitcoin supply over time),” Pandl wrote.

On Wednesday, Bitcoin was trading around $46,500 and struggled to make gains after falling sharply in early December.

Bitcoin hit an all-time high of $69,000 in November.

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Despite the ups and downs, the world’s biggest cryptocurrency still managed to top Goldman Sachs’ 2021 return scorecard with over 60% yearly returns, whereas gold is at the bottom with a 4% yearly loss.

“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,” Pandl wrote.

Picture Credit: Investopedia