In a research note to clients, Goldman Sachs analyst Zach Pandl said that as digital assets become more widely adopted, Bitcoin will take the bigger market share away from gold in 2022.
Compared to the nearly $2.6 trillion worth of gold owned as an investment, the cryptocurrency currently has a 20% share of the “store of value” market, citing bitcoin’s $900 billion market capitalization, according to Goldman Sachs.
In a list of 2022 predictions, Goldman Sachs said, Bitcoin will “most likely” get a bigger proportion over time. The note said that Bitcoin’s price would reach just over $100,000, in a hypothetical scenario in which it grabs a 50% share of this market.
Having struggled to make gains after falling sharply in early December, on Wednesday Bitcoin was trading around $46,073 but it has since dropped to trade below$43,000. An all-time high of $69,000 was hit in November.
“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.”
Assets that can maintain their worth over time without depreciating, such as precious metals or some currencies, are usually described with the term “store of value”. In 2021, Goldman Sachs restarted its cryptocurrency trading desk.