Bitcoin may have applications beyond simple storage of value, Goldman Sachs acknowledges.
The bank estimates that the dependence and demand for BTC will continue to grow.
Bitcoin (BTC) is inevitable and the facts prove it. US investment bank Goldman Sachs notes that the market-leading cryptocurrency will continue to roll out swathes of gold, as well as forecast a price of $100,000 for BTC in the next five years, if it increases its share of the reserve market value.
In a note from Zach Pandl quoted by Bloomberg, who is the co-head of global strategy for currencies and emerging markets, the bank, which has already had a friendly attitude towards the emerging ecosystem and more precisely with Bitcoin, states that the market capitalization, adjusted by the BTC float, Just under 700 billion dollars In the market value store.
They note that this represents 20% of the market share of value stores made up of bitcoin and gold. The latter, a preferred asset for long-term savers and investors, It currently has an average market capitalization of $2.6 trillion.
Thus, if Bitcoin’s participation in the reserves market “by default,” as they suggest, increases by 50% over the next five years, The price of the digital currency will be more than 100,000 USD, for an annual compound return of 17% or 18%.
According to Goldman Sachs, the market capitalization of cryptocurrencies like . can grow A byproduct of the broader adoption of digital assets, “This is probably due to Bitcoin’s scaling solutions.”
“Bitcoin may have applications beyond simple storage of value, and the digital asset market is much larger than Bitcoin, but we believe that comparing its market capitalization to gold can help set standards for reasonable Bitcoin returns.”
Investment bank Goldman Sachs.
Goldman Sachs’ comments come as BTC is trading above $46,000, according to CryptoNews Price Calculator.
The bank, noting that bitcoin was one of the top performing assets through the end of 2021, explained that demand will continue to grow, Even with the challenge that real network resource consumption can pose to business or institutional adoption.
Bitcoin accounts for 20% of the store’s market share value. Source: Bloomberg.
The listing of BTC as digital gold has been around and has been around for a while now, So it is not uncommon for Goldman Sachs to differentiate between the two originals.
In the past year, as reported by CryptoNews, there have been many comments comparing the market leading cryptocurrency to the precious metal.
A report from the cryptocurrency broker, eToro, stated that Bitcoin will become the digital gold of the new era. In the paper, they note that if BTC increases its realized market value by 50% every year until 2030, It will outperform gold with a capitalization of over $13.1 trillion and will be worth $2,114,385 per unit.
Along the same lines, Visa CEO Alfred Kelly described bitcoin as digital gold, meaning it is a speculative asset. In addition, he said that the company he headed is working To facilitate the purchase and use of this cryptocurrency as a means of payment through cards.
On Wednesday, January 5, Bitcoin is trading above $46,600. Source: CoinMarketCap.
Bitcoin, a “pure cryptocurrency”
Goldman Sachs’ memo highlights Goldman Sachs’ acceptance of Bitcoin. In fact, in the same week, CriptoNoticias reported a report from that institution that, among other things, classified BTC as a “pure cryptocurrency.”
In its “Digital Asset Overview” report, the bank notes that Bitcoin is immediately beneficial. As for the entity, there has been a twist in the BTC narrative As a digital store of value driven by rarity, security and brand value.
According to the foundation, BTC is “particularly useful in countries with volatile currencies,” such as Venezuela or Argentina, where its adoption has been driven by inflation.
In the same narrative, a few months ago this bank joined the financial services and investments in the cryptocurrency company, Galaxy Digital, To provide liquidity in the operations of Bitcoin futures contracts to the clients of the financial institution, fact hereby registered.
Overtaking gold as a reserve asset is, it seems, New target for bitcoin. It can be achieved, although the massive adoption of the asset will also have to be determined. The good thing is that progress is already being made in a positive way.