Bitcoin will compete with gold as ‘store of value’: Goldman Sachs analyst

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Bitcoin will pull market share 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 (roughly Rs. 52 08735 crore) market cap, compared to approximately $ 2.6 trillion (roughly Rs. 1953.4510 crore) of gold held as an investment, Goldman Sachs said the cryptocurrency currently has a 20 percent “store of value” market share. The price of Bitcoin in India stood at Rs. 34.1 lakh at noon IST on January 6th.

Bitcoin will “very likely” become a larger proportion over time, Goldman Sachs said, in a 2022 forecast listing.

In a hypothetical scenario in which Bitcoin would capture 50% of that market’s share, its price would rise to just over $ 100,000 (around Rs. 75 lakh), according to the note.

Bitcoin was trading around $ 46,073 (around Rs. 34 lakh) on Wednesday, after struggling to make gains after falling sharply in early December. By November, it had hit a record high of $ 69,000 (around Rs. 51 lakh).

“Bitcoin may have applications beyond a simple ‘store of value’ – and digital asset markets are much more important than Bitcoin – but we believe that comparing its market capitalization to gold can help define parameters on plausible outcomes for Bitcoin returns, ”Pandl wrote.

The term “store of value” generally describes assets that can retain their value over time without depreciating, such as precious metals or certain currencies.

Goldman Sachs restarted its cryptocurrency trading desk in 2021.

© Thomson Reuters 2022


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