Bitcoin $100K possible by chipping away at gold’s market share: Goldman Sachs

Bitcoin (BTC) failed to shut 2021 above the long-expected $100,000 degree, however consultants consider the psychological horizon continues to be achievable by taking gold’s market share, albeit over a extra prolonged interval.

In a word launched to buyers on Tuesday, Goldman Sachs co-head of world FX and EM technique Zach Pandl hypothesized that if the biggest cryptocurrency might overtake 50% of the shop of worth market share over the subsequent 5 years, BTC worth would improve to only over $100,000, marking a compound annualized return of 18%.

While the present market cap of BTC is near $884 billion, Goldman Sachs estimates the float-adjusted market cap of Bitcoin is below $700 billion, accounting for one-fifth of the “store of value” market. The stated market isn’t crowded, although. The solely different participant of Goldman’s retailer of worth market is gold, with an obtainable funding at $2.6 trillion.

Despite its ups and downs, Bitcoin nonetheless managed to high Goldman Sachs’ 2021 return scorecard with over 60% yearly returns. Gold is positioned at the underside in the identical chart with a 4% yearly loss.

Yearly returns scorecard. Source: Goldman Sachs Global Investment Research

Related: Wait-and-see strategy: 3/4 of Bitcoin provide now illiquid

Goldman Sachs consultants consider that the demand for BTC is not going to be harmed by the recent debate surrounding the Bitcoin community’s power consumption. While a latest examine claims the Bitcoin ecosystem consumes eight occasions the power of Google and Facebook mixed, New York Digital Investment Group estimates that Bitcoin mining is not going to signify greater than 0.4% of world electrical energy consumption over the subsequent decade.

As detailed in a Cointelegraph New Year Special, Bitcoin noticed a bumpy trip during the last yr. Many consultants believed that $100,000 was a straightforward goal for the flagship cryptocurrency for 2021. However, BTC closed the yr round $47,000 after touching an all-time excessive round $69,000 in November, falling wanting analysts’ bold goal.