today, Bitcoin (CRYPTO: BTC) It has a market cap of about $1.4 trillion. The market value of gold is about 36 trillion dollars. Thus there is a huge gap separating the world’s most popular digital asset, which some call digital gold, and the precious metal that people have used as a store of value for thousands of years.
But just a few years ago, Bitcoin didn’t even exist, and its astonishing rise from ephemeral asset to mainstream asset is enough to make many investors wonder if it might one day become a play or even an upside to gold. Let’s see if this proposal is true and what will happen for it to happen.
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In order for Bitcoin to match the market cap of gold today, its price would have to increase 27 times from its current value of around $68,000 to nearly $1.9 million per coin. This number may seem incredibly high, but it is not.
About 95% of the 21 million bitcoins that will ever exist have already been mined. Beyond that, an estimated 3 million to 4 million coins are lost forever to forgotten passwords, damaged hardware, or deceased owners. And, after its next halving, which is scheduled for 2028, only 1.5 bitcoins will be issued every 10 minutes, meaning that its new supply will be reduced to a small trickle, with even fewer exports expected in subsequent halvings, which occur every four years.
So in terms of its scarcity, which is one of the main reasons the asset functions as a store of value at all, the Bitcoin protocol ensures that its supply will never hit the market.
What’s more, a new group of customers are looking to secure their allocations. Spot Bitcoin exchange-traded funds (ETFs), corporate treasuries, governments, and digital asset treasuries (DAT) companies have all been buying more coins since last year than ever before. ETFs (and thus ETF-issuing companies) now hold 7% of the potential supply of Bitcoin, while governments hold 2.5% and public companies hold 5.1%. These players are all slow to sell when they invest.
And if the coin ever flips gold, it will require a years-long process where institutional buyers compete with each other as they save as much wealth as possible, and avoid selling. Assuming the acceptance rate and its scarcity continue to provide it with the same price performance as in the past, the earliest it could be worth $1.9 million per coin would be as early as 2035, meaning it would be worth more than gold. So here is a real way.
