Bitcoin could well be coming for gold’s “store of value” crown in the not-too-distant future, according to financial giant Goldman Sachs.
In a note written to the Wall Street behemoth’s clients this week, Goldman Sachs’ co-head of foreign exchange strategy Zach Pandl indicated that Bitcoin could grab market share from gold over the next handful of years as a “byproduct” of increasing adoption.
“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),” read the note.
The current market cap of BTC is about US$880 billion according to CoinGecko, but Goldman estimates the “float-adjusted” market cap of the OG crypto is a bit less than US$700 billion – about 16% of the “store of value market”. And that’s a market, according to the financial titan, that consists only of gold and Bitcoin.
Gold has an estimated current market capitlisation value of about US$11.5 trillion.
While Bitcoin is crabbing sideways into 2022 so far (currently sitting at about US$46.2k) and didn’t get close to the sort of end-of-year targets many had been predicting (for example, PlanB’s US$100k minimum), it did still manage to top Goldman Sachs’ 2021 asset yearly returns scorecard…
And casting a further positive outlook on the crypto asset, Goldman Sachs experts also believe the demand for BTC won’t be affected by any negativity still arising from the perception of the Bitcoin network’s energy consumption.
According to Cointelegraph and a paper published by the New York Digital Investment Group (NYDIG) in September, carbon emissions from Bitcoin mining shouldn’t reach untenable levels in coming years even if the price of Bitcoin increases dramatically.
In fact, NYDIG’s estimate is that BTC mining won’t represent any more than 0.4% of global electricity consumption over the next 10 years.