The Gold standard could push Bitcoin to $100,000, Goldman Sachs says. Depending on whether investors accept the premise that bitcoin is truly digital gold. Bitcoin might be worth $100,000, according to an analysis by Goldman Sachs.
Bitcoin has a market capitalization of $870 billion at its current price of roughly $46,800. Compared to $2.6 trillion for gold owned by the public for investment purposes,. Such as privately held bars and assets in exchange-traded funds. Which has a market capitalization of $2.6 trillion.
According to Goldman Sachs, the publicly available float of Bitcoin is just under $700 billion. Owing to the fact that a significant proportion of Bitcoin is not traded. According to this calculation, Bitcoin accounts for 20 percent of the whole “store of value” market. Which includes both Bitcoin and gold, assuming gold is currently trading. At roughly $1,800 an ounce and 44,000 metric tons of gold. Are in circulation for investment purposes.
According to Goldman analyst Zach Pandl, if Bitcoin’s market share of the “store of value.” Sector were to expand to 50%, the cryptocurrency might reach a value of $100,000. According to a note published on Tuesday, “we believe that Bitcoin’s market share. Will most likely increase over time as a result of widespread acceptance of digital assets.”
If Bitcoin reaches $100,000, it would have annualized gains of 17 percent.Over the next five years, assuming no inflation. The aim does not anticipate growth in demand for “store of value” assets. And it takes into account the growth in supply of Bitcoin. Which is currently created at a rate of approximately 900 coins per 24 hours. At the present production rate (scheduled to halve in early 2024).
But Bitcoin won’t hit $100,000 overnight the Gold
Bitcoin, on the other hand, will not be able to make a straight shot to $100,000—if it ever does. “The network’s consumption of actual resources may continue to be a significant barrier. To institutional adoption,” adds Pandl, referring to the toll. That Bitcoin mining takes on the environment in terms of energy usage.
That is not a trivial topic in any way. Numerous countries are attempting to minimize. Their carbon emissions, and Bitcoin mining. Which involves a global network of computers processing transactions. Does not contribute to this effort. According to the Cambridge Bitcoin Electricity Consumption Index. Bitcoin miners consume 0.56 percent of the world’s total electricity consumption. Which is comparable to the amount consumed by countries. Such as Norway and Sweden, respectively.
However, Bitcoin is also mined using energy from coal, oil, and natural gas-fired power plants. Which accounts for a portion of the total energy used. And it’s becoming increasingly difficult to justify.In countries that are experiencing chronic energy shortages. And skyrocketing energy prices.
Protesters stormed government offices in Kazakhstan on Wednesday. Claiming that rising energy prices were to blame for the country’s economic boom. Following China’s prohibition on the practice. The internet was shut down by the country’s telecommunications operator. Thus cutting off Bitcoin miners.
Given the hard cap on the supply of bitcoin, it may be significantly more temptin. A s a store of value than other cryptocurrencies. However, it is also in a competition with other cryptocurrencies for investment capital. The total market capitalization is $2.2 trillion. With Ether accounting for $450 billion and Binance Coin accounting for $85 billion. And, unlike many other cryptocurrencies, which are finding use like “smart contracts” for cryptocurrency trading. Lending, and the creation of new digital assets such as nonfungible tokens.