According to Goldman Sachs, a bitcoin price USD 100,000 could become reality if the cryptocurrency continues to take market share as a store of value asset from gold. Mike McGlone, a Bloomberg analyst, believes that 2022 may be the year gold shines once again.
The US investment banking giant, Goldman Sachs, estimates that bitcoin’s floating-adjusted capitalization is just below USD 700bn. This represents 20% of a store of value market made up of bitcoin and gold. In a recently published note, Goldman Sachs stated that the current value of gold available to invest is USD 2.6trn.
Goldman stated that bitcoin could reach USD 100,000 if it holds a 50% market share, but it also claimed that the digital asset would continue to gain market share from gold.
Zach Pandl, Goldman Sachs’ global FX and EM strategist, made the comments about bitcoin in a private note.
The analyst at Goldman suggested that the lofty price target could be achieved in the next five-years, giving a compound annualized return between 17% and 18%.
The note also stated that investors will continue to seek exposure to cryptocurrency despite criticisms surrounding Bitcoin’s electricity consumption. This is known as energy FUD in bitcoin circles.
Goldman Sachs claims that bitcoin will continue taking market share from gold over the next five year, but Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, stated in a new report gold could shine again in 2022.
McGlone compared gold to the industrial metal copper in the report. “For reasons that seem more durable in 2022,” McGlone stated.
McGlone stated that while a slowdown could be bad for industrial metals in China, it could also be a good sign for precious metals such as gold.
In the meantime, the on-chain analytics company coin Metrics stated Tuesday in its State Of the Network Report that while bitcoin is growing in popularity in 2020, 2021, as a hedge against inflation. However, things could change in 2022 if central banks take action in order to combat risin.
The report said that although the US may tighten their monetary policies, inflation is high in the Euro zone and countries like Turkey.
The report stated that Turks are already looking for alternative sources of value with inflation at over 20%. Before adding:
“If we truly are in the era Great Monetary Inflation,” the report stated, referring to the phrase coined by Paul Tudor Jones, a famous hedge fund manager.
BTC trades at USD 46,746 on Wednesday at 11:13 UTC. It has fallen 2% in the past week, but is still unchanged for the day.