Bitcoin was created to share several key similarities with gold, but the effect was an all-digital asset that does what the precious metal does best even better and then some.
Eventually, the first-ever cryptocurrency could yield a similar-sized market cap as the precious metal has today, and one of the crypto population’s best analysts has drawn the path on how Bitcoin could get there and when.
The Clear Path For Crypto To Match The Precious Metal King’s Market Cap
Bitcoin is a challenging asset to assign a fair market value. Its value is principally risky in its current state, making it sensitive to violent price swings as price discovery takes place.
As technology is steadily being adopted, Bitcoin’s network effect keeps its price increasing rapidly over a differential growth curve.
This takes mapping Bitcoin in log scale the favored pick for crypto analysts conducting an expert analysis.
Looking at a Bitcoin price chart on a linear scale looks like a typical bubble up until lately. With the switch to log scale rather shows a fastening curved channel.
The uncertainty within the top and bottom bands lessens over time as the technology is more and more adopted.
One top pseudonymous crypto analyst who is an supporter of charting Bitcoin in log scale and advocate of stretching market cycle principles in the first-ever cryptocurrency has used this increasing channel to predict when.
Bitcoin could correspond to the market cap of gold. In the past, he has used it to time Bitcoin’s bottom around $3,200 successfully, and the peak in 2019.
Gold’s market cap is $9 trillion, as claimed by the analysts. Still, incompatible information from Fidelity Digital Assets declares it to be as high as $12 trillion lately, in a data highlighting how Bitcoin could play next to stocks, metals, and more.
Nevertheless, of the exact figures, Bitcoin would need to pull a “40x” to reach the market cap of gold, give or take a few billion. And when this happens, there will be some time between 2030 and 2040 according to the analyst’s log chart’s lowest and highest boundaries.
Why Digital Gold Is Outperforms The Original In Every Way
Similar data growth is visible on the XAUBTC price chart, putting Bitcoin up directly against the original asset.
Gold versus BTC chart also shows the cryptocurrency’s network effect in action, rapidly outperforming gold in the 12 short years the Bitcoin core code has been running.
Digital gold beats regular gold in just about every way and recently has been proving its value during the pandemic.
No significant contact asset can be stored without taking up any space, free of the reach of thieves or the government, and it could, in theory, hold value better than both fiat and gold in the long term.
Its lack of a physical state would have saved the Dutch a fortune and a ton of time. Recently, the Dutch Central Bank moved 14,000 gold bars and boxes and boxes of gold coins.
It took 22 hours and armed forces to move it securely, only 20km. Planning it and coordinating such action also would have taken a significant amount of time and effort.
Had it been Bitcoin instead, it would have moved at a fraction of the cost, a fraction of the time required only the security the blockchain network provides, and when it arrived, it would need to space to store it.
Planning it would require just a thought, and executing the transaction just a few clicks.
In a recent scenario where $1 billion in BTC was sent related to a Silk Road wallet, the transaction fee was roughly $14 worth Bitcoin or 0.00087980 BTC.
The transaction is also completely valid for authenticity without the need for a detailed inspection. Bitcoin does this for you, whereas you can be confident the gold was inspected closely for any evidence of tampering or counterfeits, even despite the armed convoy.
As more investors, hedge funds, institutions, and even eventually central banks realize these benefits and the cost and time savings that cryptocurrency can afford them, there will be no stopping capital from gold to help further to achieve the nearly $10 trillion target the chart maps out.
A $10 trillion market cap, at the circulating supply of BTC, would take the asset’s price to around $500,000 per BTC.
The total amount lines up with several top experts outside of the analyst we’ve put a spotlight on here, such as Tim Draper and Max Keiser.
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