Can Bitcoin (CRYPTO:BTC) steal gold's safe haven shine to top US$100,000?

Investors are looking for ways to protect their wealth as global economic uncertainty increases.

Bernd Struben

Author bio Bernd Struben earned his BA in economics from the University of Michigan in 1991, with post-graduate studies in environmental economics at the University of Connecticut. Over the years he’s written about and analysed the tourism industry in the Caribbean; Europe’s commercial real estate markets; and, since moving to Australia in 2010, global and Aussie share markets. Bernd studies geopolitical and macroeconomic trends, alongside sector and company specific data, to gauge what he believes could be tomorrow's best investments. In his free time, you might find Bernd at the beach with his family or working on his next science fiction novel. Areas of expertise Australian and global share markets Macroeconomic and geopolitical trends Real estate Education Economics, University of Michigan Favorite investment quote "The four most dangerous words in investing are: 'This time it's different." — Sir John Templeton

Published January 6, 2022 12:10 pm AEDT

Bitcoin (CRYPTO: BTC) to US$100,000?

With the token currently trading for US$43,550, down 5% in the past 24 hours, that may sound like a bit of a stretch.

But then don't forget that only 2 years ago, on 6 January 2020, one Bitcoin was worth a mere US$7,770. And this time last year it was trading for US$36,820 before rocketing to new all-time highs of US$68,790 on 10 November.

So, what could help propel Bitcoin beyond its previous record high and onto US$100,000?

ASX gold shares crypto Illustration of gold bullion and bitcoin layered in front of a share price chart — Image source: Getty Images

Bitcoin as a store of value

That price target comes from none other than global investment advisor, Goldman Sachs.

According to Goldman's analysts, the Bitcoin price could soar if the digital asset takes on a larger share from gold of what's known as the store of value market.

As Bloomberg reports:

Goldman estimates that Bitcoin's float-adjusted market capitalization is just under $700 billion. That accounts for 20% share of the 'store of value' market which it said is comprised of Bitcoin and gold. The value of gold that's available for investment is estimated at $2.6 trillion.

According to Zach Pandl, Goldman Sachs' co-head of global FX and EM strategy, the Bitcoin price could top US$100,000 over the next 5 years if its share of the store of value market were to increase from the current 20% to 50%. From today's prices that works out to a compound annualised return of 17–18% over the 5 years

Watch the volatility

Bitcoin is a newcomer when it comes to haven assets, or a place to store value. While it's certainly outpaced inflation, the price volatility is far higher than what we see with gold.

The yellow metal is currently trading for US$1,811 per ounce. Looking back over the past 12 months, gold reached lows of US$1,684 on 8 March and a high of US$1,908 on 2 June.

Bitcoin, on the other hand, dropped as low as US$29,807 on 20 July before then going on to hit US$68,790 on 10 November.

Investors seeking a new store of value to guard against government money printing and other global economic uncertainties will need to keep those Bitcoin price swings in mind.

Automatic Renewal

By taking up this offer, you will also be enrolled in our auto-renewal program, which is our way of making your ongoing subscription easier by ensuring uninterrupted service. Don't worry, though – you're not locked in, and can cancel your auto-renewal at any time before each 'anniversary' date without question or penalty.