Despite continued volatility, Goldman Sachs believes that 2022 will be the year that Bitcoin takes market share away from gold and even overtake the total market size of the traditional safe haven asset over time.
At around $700 billion in market capitalization, bitcoin currently has a 20 percent share of the «store of value» market, according to a Goldman Sachs research note to clients authored by analyst Zach Pandi.
In fact, the leading cryptocurrency is expected this year to compete with gold – a market valued around $2.6 trillion – and «most likely» overtake the yellow metal due to greater adoption.
At a hypothetical 50 percent share of the store of value market, Bitcoin’s price would exceed $100,000, the note said.
More Than Store of Value
Interestingly, the note also highlighted that bitcoin could serve as more than just a store of value – a major driver of demand due to unprecedented monetary easing worldwide.
«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,» Pandi added.
Most recently, Bitcoin tumbled to around $43,000 from the all-time high of $69,000 in November, believed to be driven in part by the unexpected hawkishness of the Federal Reserve’s most recent minutes, signaling the potential for higher interest rates sooner.
