Goldman Sachs says bitcoin will compete with gold as “store of value”

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LONDON, Jan 5 (Reuters) — Bit­coin will take mar­ket share away from gold in 2022 as dig­i­tal assets become more wide­ly adopt­ed, Gold­man Sachs ana­lyst Zach Pan­dl said in a research note to clients.

Cit­ing bit­coin’s $700 bil­lion mar­ket cap­i­tal­iza­tion, com­pared to the around $2.6 tril­lion worth of gold owned as an invest­ment, Gold­man Sachs said that the cryp­tocur­ren­cy cur­rent­ly has a 20% share of the “store of val­ue” market.

Bit­coin will “most like­ly” become a big­ger pro­por­tion over time, Gold­man Sachs said, in a list of 2022 predictions.

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In a hypo­thet­i­cal sce­nario in which bit­coin grabs a 50% share of this mar­ket, its price would reach just over $100,000, the note said.

A rep­re­sen­ta­tion of the vir­tu­al cryp­tocur­ren­cy Bit­coin is seen in this pic­ture illus­tra­tion tak­en Octo­ber 19, 2021. REUTERS/Edgar Su/File Photo

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Bit­coin was trad­ing around $46,073 on Wednes­day, hav­ing strug­gled to make gains after falling sharply in ear­ly Decem­ber. In Novem­ber, it had hit an all-time high of $69,000 .

“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.

The term “store of val­ue” usu­al­ly describes assets which can main­tain their worth over time with­out depre­ci­at­ing, such as pre­cious met­als or some currencies.

Gold­man Sachs restart­ed its cryp­tocur­ren­cy trad­ing desk in 2021. read more 

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Report­ing by Eliz­a­beth How­croft; Edit­ing by Saikat Chatterjee

Our Stan­dards: The Thom­son Reuters Trust Principles.

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