Goldman Sachs assumes a scenario where bitcoin adoption increases as a store of value for investors versus gold.
Bitcoin can snag market share from gold over time as a “byproduct” of more adoption along with the potential from “Bitcoin-specific scaling solutions,” Goldman Sachs’ co-head of foreign exchange strategy Zach Pandl said in a research note to clients Tuesday.
“Hypothetically, if Bitcoin’s share of the ‘store of value’ market were to rise to 50% over the next five years (with no growth in overall demand for stores of value) its price would increase to just over $100,000, for a compound annualized return of 17-18% (accounting for growth in Bitcoin supply over time),” Pandl wrote in the note.
Goldman estimates that the public holds about $2.6 trillion of gold for investment purposes, assuming a gold price of $1,800 per troy ounce. Bitcoin’s float-adjusted market capitalization is currently just under $700 billion, Pandl wrote, adding that this implies Bitcoin currently commands an approximate 20% share of the “store of value” (gold and Bitcoin) market.