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?
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.
